IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


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r      A^ 


1.0 


1.1 


l^|28 
US  lU 


1^ 

■  22 
2.0 


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Photographic 

Sciences 

Corporation 


23  WfST  MAIN  STMIT 

WnSTIR.N.V.  14SM 

(7l«)t72-4S03 


CIHM/ICMH 

Microfiche 

Series. 


CIHIVl/ICIVIH 
Collection  de 
microfiches. 


Canadian  Inatituta  for  Historical  Microraproductions 


Inatitut  Canadian  da  microraproductions  hiatoriquaa 


1980 


Technical  and  Bibliographic  Notaa/Notas  tachniquaa  at  bibiiographiquaa 


Th 
to 


Tha  Instituta  has  attamptad  to  obtain  tha  baat 
original  copy  availabia  for  filming.  Faaturaa  of  thia 
copy  which  may  ba  bibliographically  uniqua, 
which  may  altar  any  of  tha  imagaa  in  tha 
raproduction,  or  which  may  aignificantly  changa 
tha  uaual  mathod  of  filming,  ara  chaclcad  balow. 


□    Colourad  covers/ 
Couvartura  da  coulaur 


I     I   Covara  damagad/ 


D 


D 


D 
0 


D 


Couvartura  andommagte 

Covars  rastorad  and/or  laminatad/ 
Couvartura  rastaurte  at/ou  palliculAa 


□   Covar  titia  missing/ 
La 


titra  da  couvartura  manqua 


□   Colourad  maps/ 
Cartas  gtegraphiquas  an  coulaur 


Colourad  inic  (i.a.  othar  than  blua  or  blacit)/ 
Encra  da  coulaur  (i.a.  autra  qua  blaua  ou  noira) 


I      I   Colourad  platas  and/or  illustrations/ 


n 


Planchas  at/ou  illustrations  an  coulaur 

Bound  with  othar  material/ 
Rail*  avac  d'autras  documents 

Tight  binding  may  cause  shadows  or  distortion 
along  interior  margin/ 

La  reliure  serrie  peut  causer  de  I'ombre  ou  de  la 
distortion  la  long  de  la  marge  intirieure 

Blanic  laavaa  added  during  restoration  may 
appear  within  the  text.  Whenever  poasibla.  theae 
have  bewn  omitted  from  filming/ 
II  se  peut  que  certainaa  pagea  blanches  ajouttes 
lore  d'une  restauration  apparaissant  dans  la  texte, 
mais.  lorsque  cela  Atait  possible,  ces  pages  n'ont 
pas  AtA  filmtes. 


Additional  comments:/ 
Commentaires  suppldmentairas: 


L'Institut  a  microfilm^  la  meilleur  exemplaire 
qu'il  lui  a  *t4  poasibla  da  se  procurer.  Les  details 
de  cet  exemplaire  qui  sont  peut-Atre  uniques  du 
point  de  vue  b 'hiiographique,  qui  pauvent  modifier 
une  image  reproduite,  ou  qui  pauvent  exiger  une 
modification  dans  la  mAthoda  normale  de  filmage 
aont  indiqute  ci-dassoua. 


r~1   Coloured  pages/ 


D 


Pages  de  couleur 

Pages  damaged/ 
Pages  endommagtes 

Pages  restored  and/oi 

Pages  restaurtes  at/ou  palliculAes 

Pages  discoloured,  stained  or  foxet 
Pages  dAcolortes,  tachettes  ou  piqutes 

Pages  detached/ 
Pages  dAtachtos 

Showthrough/ 
Transparence 

Quality  of  prir 

Quality  in^gale  de  I'impression 

Includes  supplementary  materii 
Comprend  du  material  suppl^mentaire 

Only  edition  available/ 
Seule  Mition  disponible 


I — j  Pages  damaged/ 

I     I  Pages  restored  and/or  laminated/ 

I      I  Pages  discoloured,  stained  or  foxed/ 

I     I  Pages  detached/ 

I     I  Showthrough/ 

I     I  Quality  of  print  varies/ 

I      I  Includes  supplementary  material/ 

I — I  Only  edition  available/ 


Pages  wholly  or  partially  obscured  by  errata 
slips,  tissues,  etc.,  have  been  ref limed  to 
ensure  the  best  possible  image/ 
Lea  pages  totalament  ou  partiellement 
obscurcies  par  un  feuillet  d'errata,  une  pelure, 
etc.,  ont  M  filmtes  A  nouveau  de  fapon  A 
obtanir  la  meilleure  image  possible. 


Th 
pa 
of 
fill 


Or 
ba 
th( 
sic 
oti 
fir 
si( 
or 


Tl 
sh 
Tl 

wl 

M 
dil 
er 
bfl 
ri{ 
rei 


Thia  item  la  filmed  at  the  reduction  ratio  checked  below/ 

Ce  document  est  film*  au  taux  de  rMuction  indiqu*  ci-dessous. 

10X  14X  18X  22X 


26X 


30X 


>/ 


12X 


16X 


2DX 


a4X 


28X 


32X 


Th«  copy  filmed  her*  hM  been  raproducod  thank* 
to  tlw  gonorotity  of: 

National  Library  of  Canada 


L'axamplaira  film*  fut  raproduit  grica  A  la 
gAniroaitA  da: 

Bit/lioth*qua  nationala  du  Canada 


Tha  images  appearing  here  are  the  best  quality 
possible  considering  the  condition  and  legibility 
of  the  original  copy  and  in  keeping  with  the 
filming  contract  specifications. 


Original  copies  in  printed  paper  covers  are  filmed 
beginning  with  the  front  cover  and  ending  on 
the  last  page  with  a  printed  or  illustrated  impres- 
sion, or  the  back  cover  when  appropriate.  All 
other  original  copies  are  filmed  beginning  on  the 
first  page  with  a  printed  or  illustrated  impres- 
sion, and  ending  on  the  last  page  with  a  printed 
or  illustrated  impression. 


The  last  recorded  frame  on  each  microfiche 
shall  contain  the  symbol  — ^  (meaning  "CON- 
TINUED"), or  the  symbol  V  (meaning  "END"), 
whichever  applies. 

Maps,  plates,  charts,  etc.,  may  be  filmed  at 
different  reduction  ratios.  Those  too  large  to  be 
entirely  included  in  one  exposure  are  filmed 
beginning  in  the  upper  left  hand  corner,  left  to 
right  and  top  to  bottom,  as  many  frames  as 
required.  The  following  diagrams  illustrate  the 
method: 


Lea  imsges  suivantas  ont  4tA  reproduites  avac  la 
plus  grand  soin,  compte  tenu  de  la  condition  at 
da  la  nettetA  de  I'exemplalra  filmi,  et  en 
conformiti  avac  las  conditions  du  contrat  de 
fiimage. 

Lea  exemplairaa  originaux  dont  la  couverture  en 
papier  est  imprim^e  sent  filmAs  en  commen^ant 
par  la  premier  plat  et  en  terminant  soit  par  la 
darnlAre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration,  soit  par  la  second 
plat,  aaion  le  cas.  Tous  las  autres  exemplairaa 
originaux  sont  f  ilmte  en  commenpant  par  la 
premlAre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration  et  en  terminant  par 
la  derniire  page  qui  comporte  une  telle 
empreinte. 

Un  des  symboles  suivants  apparattra  sur  la 
darnlAre  image  de  cheque  microfiche,  selon  le 
cas:  le  symboie  — ^  signifie  "A  SUIVRE".  le 
symbols  ▼  signifie  "FIN". 

Les  cartes,  planches,  tableaux,  etc.,  peuvent  Atre 
filmte  A  des  taux  de  reduction  diff Arents. 
Lorsque  le  document  est  trop  grand  pour  Atre 
reproduit  en  un  seul  clichA,  11  est  filmA  A  partir 
de  I'angle  supArieur  gauche,  de  gauche  A  droite, 
et  de  haut  en  bas,  en  prenant  le  nombre 
d'images  nAcessaire.  Les  diagrammes  suivants 
illustrent  la  mAthodo. 


1 

2 

3 

1 

2 

3 

4 

5 

6 

/o 


EC 


'i 


SELECTIONS 


lUUSTBATINO 


ECONOMIC   HISTORY 


SINCE  THE  SEVEN  YEAES'  WAR. 


COMPILED  BY 


BENJAMIN  RAND,  Ph.D., 

ASSISTANT   IN  PUILOSOPHr.  HABVABD  UKIVElUHTr. 


Wxti  SUttion, 

WITH  A  BIBUOGRAPar  OF  ECONOMICS. 


CAMBRIDGE: 

JOHN    WILSON    AND    SON. 

anibraitB  ^Iras. 

1895. 


1343S1 


Copyright,  1892, 1895, 
Br   Benjamin   Band. 


PREFATORY  NOTE 


TO  THE  SECOND  EDITION. 


'T^HE  first  edition  of  these  selections  was  published 
as  a  text-book  of  required  reading  to  accom- 
pany a  course  of  lectures  on  economic  history  given 
at  Harvard  College.  It  was  also  adopted  for  a 
similar  purpose  by  other  American  Universities.  A 
continued  demand  for  the  work  has  led  to  the 
preparation  of  the  present  revised  and  enlarged 
edition.  The  design  of  the  book  has  been  to  ex- 
hibit in  a  series  of  articles  of  permanent  value 
different  phases  of  economic  thought,  and  to  pre- 
sent in  chronological  order  a  narrative  of  some  of 
the  more  important  events  and  influences  of  modern 
economic    hlstorv. 

In  tliis  edition  one  chapter  contained  in  the 
former  edition  has  been  omitted  and  five  new 
selections  have  been  introduced.  Appendices  have 
also  been  added  as  the  most  convenient  form  in 
which  to  place  laws,  purely  statistical  material,  and 


IV 


PREFATORY  NOTE. 


very  recent  economical  data.  A  bibliography  has 
likewise  been  inserted,  which  it  is  hoped  may  be 
of  service  in  the  formation  of  special  libraries  of 
economic  history.  The  present  edition  moreover 
contains  an   index. 

The  names  of  publishers,  to  whose  courtesy  is  due 
the  permission  to  reprint  a  number  of  the  selections, 
will  be  found  at  the  beginning  of  the  respective 
chapters. 

B.  R. 

Camoridoe,  December,  1801. 


PREFATORY  NOTE  TO  THE  THIRD  EDITION. 

The  second  edition  of  this  work  contained  a  brief 
bibliography  of  Economic  History.  In  the  present 
edition  will  be  found  a  Select  Bibliography  of  Eco- 
nomi  3S,  embracing  the  more  important  English,  French, 
German  and  Italian  authorities  in  general  economic 
literature. 

B.  R. 

Cambridoe,  March,  1895. 


CONTENTS. 


Chapter  Page 

I.    The  Colonial  Policy  op  Europe 1 

From  Adam  Smith's  Wealth  of  Nations. 

II.    The  Great  Invextion8 31 

From  Spencer  VValpole'a  History  of  England. 

III.  Economic  Causes  op  the  French  Revolution    .      56 

From  Heinrich  Von  Sybel's  French  Revolution. 

IV.  The  Edicts  op  Stein  and  Hardenbero: 

The  Emancipating  Edict  of  Stein    ....       86 
From  J.  R.  Seeley's  Life  and  Times  of  Stein. 

The  Agrarian  Legislation  op  Hardenbero  .       98 

From  R.  B.  D.  Morier's  "  The  Agrarian  Legislation 
of  Prussia  in  the  Present  Century  "  in  Systems  of 
Land  Tenure  in  Various  Countries. 

V.     The  Orders  in  Council 109 

From  Leone  Levi's  History  of  B'itish  Commerce. 

VI.     The  Finances  op  England,  1793-1815  ....     126 
From  G.  R.  Porter's  Progress  of  the  Nation. 

VII.     La  Politique  Commerciale  de  la  Restauration    148 

From  E.  Levasseur's  Histoire  des  Classes  Ouvriferes 
en  France  depuis  17S9  jusqu'ii  nos  Jours. 

VIII.    The  Zollverein 170 

From  John  Bowring's  Report  on  the  Prussian  Com- 
mercial Union,  Pari.  Doc,  1840. 

Le  Zollverein 196 

From  A.  Legoyt's  La  France  et  r£tranger. 


V 


vi 


CONTENTS. 


( 'II A  ITER 

IX.    The  Cobx  Laws,  1801-1849 

From  Leone  Levi's  Iliytory  of  Britisli  Coiutnerce. 


X.    The  Nkw  Gold 

From  J.  E.  Cairnes'  EssnyH  in  Political  Economy. 

XI.     Fkanck  sous  lk  Skcoxi)  Emimkk 

From  E.  Levasseur's  llistoire  des  Cla-sHes  Ouvriferes 
en  France  depuis  1789  jusqu'A  nos  Jours. 

XII.     Recent  Chaxges  in  Tuanspoutation  and  Pro- 

DUCTION 

From  David  A.  Wells'  Recent  Economic  Changes. 

XIII.  The  French  Indemnity: 

The  Payment  of  the  Five  Milliards  .     .     . 
From  Blackwood's  Edinburgh  Magazine,  1875. 

The  Application  of  the  Indemnity      .     .     . 

From  G.   Fr.   Kolb's  The  Condition    of   Nations 
(Trans.  Mrs.  Brewer). 

XIV.  The  Liquidations  of  1873-70 

From  Robert  Giffen's  Essays  in  Finance. 

XV.     The  United  States  in  1880: 

The  Increase  of   Population   from  1700  to 
1880 

From  Francis  A.  Walker  and  Henry  Gannett's  Re- 
port on  the  Progress  of  the  Nation,  Tenth  Census. 

The  Factory  Systesi 

From  Carroll  D.  Wright's  Report  on  the  Factory 
System  of  the  United  States,  Tenth  Census. 

The  Cotton  ]\rANUFACTrREs 

From  P^dward   Atkinson's  Report  on  the  Cotton 
JVIanufactures,  Tenth  Census 

The  Iron  and  Steel  Industries 

From  James  M.  Swank's  Statistics  of  the  Iron  and 
Steel  Production,  Tenth  Census. 


Paoi 

207 


242 


284 


298 


32(; 


3.".(i 


3oo       ] 


»«■> 


400 


410 


435 


CONTENTS. 


Tii 


ClIAI'TER  VaUH 

XVI.       LeS   DeTTES   PUBLIQUKS 450 

From  Alfred    Neymarok'i   Lea    Dettes    Fubliquei 
£urop<SeDDe8. 

XVII.     The  World's  Prooke».s  in  Trade  and  Industry    469 
From  F.  X.  von  Neumann-Spallart's  Uebersichten 
d«r  Weltwirthscbaft  (Trauslated  in  Jouruol  of  the 
Statistical  Society). 


APPENDICES. 

I.    Leading  Sections  from  the  Enolish  Navigation 

Acts 511 

From  English  Statutes  at  Large. 

II.  Important    Sections    of    American    Navigation 

Acts 515 

From  United  States  Statutes  at  Large. 

III.  The  American  Civil  War: 

Cost  of  the  Civil  War 520 

From  David  A.  Wells'  Report  as  Special  Commissioner 
of  the  Revenue,  1860. 

The  Payment  of  the  War  Debt 522 

From  Hugh  McCulloch's  Report  as  Secretary  of  the 
Treasury,  1884. 

IV.  The  Growth  of  Canada,  18G7-1800 525 

From  George  Johnson's  Graphic  Statistics  of  Canada. 

V.    The  United  States  in  1890: 

The  Population  of  the  United  States,  1890    .     526 

By  Robert  P.  Porter  [Eleventh  Census  Bulletin,  No.  16]. 

Iron  and  Steel  Industries: 

Iron-Ore  Mining  Industry 529 

By  John  Birkinbine  [Eleventh   Census    Bulletin, 
No.  113]. 


viii 


CONTENTS. 


Paoi 

V.    The  United  States  in  1890  {Continutd): 

Production  of  PioJkon 535 

By  William  M.  Sweet  [£leveuth  Censiu  Bulletio, 
No.  0]. 

Production  of  Steel 638 

By  William  M.  Sweet  [Eleventh  CenHiu  Bulletin, 
No.  13]. 

Municipal  Beceipts  and  Expenditures    .     .     .     642 
Summary  of  Report  of  J.  K.  Upton,  by  Robert  P. 
Porter  [Eleventh  Census  Bulletin,  No.  82]. 

National,  State,  and  County  Indebtedness    .    643 
Summary  of  Report  of  J.  K.  Upton,  by  Robert  P. 
Porter  [Eleventh  Census  Bulletin,  No.  64]. 


Biblioorapbt  of  Economics 64o 

Ixdex 631 


ECONOMIC   HISTORY. 


I 


THE  COLONIAL  POLICY  OP  EUROPE. 


FnoM  Adam  Smith's  Wealth  of  Nations,  Book  IV.,  Cn.  Vll., 

Part  II. 


J.   "■ 


THE  colony  of  a  civilized  nation  which  takes  possession 
cither  of  a  waste  country  or  of  one  so  thinly  inhabited 
that  the  natives  easily  give  place  to  the  new  settlers,  ad- 
vances more  rapidly  to  wealth  and  greatness  than  any  other 
liinnan  society. 

The  colonists  carry  out  with  them  a  knowledge  of  agri- 
culture and  of  other  useful  arts,  superior  to  what  can  grow 
up  of  its  own  accord  in  the  course  of  many  centuries  among 
savage  and  barbarous  nations.  They  carry  out  with  them, 
too,  the  habit  of  subordination,  some  notion  of  the  regular 
government  which  takes  place  in  their  own  country,  of  the 
system  of  laws  which  supports  it,  and  of  a  regular  adminis- 
tration of  justice;  and  they  naturally  establish  something  of 
the  same  kind  in  the  new  settlement.  But  among  savage 
and  barbarous  nations  the  natural  progress  of  law  and  gov- 
enunont  is  still  slower  than  the  natural  progress  of  arts, 
after  law  and  government  have  been  so  far  established  as  is 
necessary  for  their  protection.  Every  colonist  gets  more 
land  than  he  can  possibly  cultivate.  He  has  no  rent,  and 
scarce  any  taxes  to  pay.  No  landlord  shares  with  him  in 
its  produce,  and  the  share  of  the  sovereign  is  commonly  but 
[a  trifle.  He  has  every  motive  to  render  as  great  as  possible 
I  a  produce  which  is  thus  to  be  almost  entirely  his  own.     But 

1 


rr^ 


2 


ECONOMIC  HISTORY. 


his  land  is  commonly  so  extensive  that  with  all  his  own 
industry,  and  with  all  the  industry  of  other  people  whom  he 
can  get  to  employ,  he  can  seldom  make  it  produce  the  tenth 
part  of  what  it  is  capable  of  producing.  He  is  eager,  there- 
fore, to  collect  laborers  from  all  quarters,  and  to  reward 
them  with  the  most  liberal  wages.  But  those  liberal  wages, 
joined  to  the  plenty  and  cheapness  of  land,  soon  make  those 
laborers  leave  him,  in  order  to  become  landlords  themselves, 
and  to  reward,  with  ecpial  liberality,  other  laborers,  who 
soon  leave  them  for  the  same  reason  that  they  left  their  first 
master.  The  liberal  reward  of  labor  encourages  marriage. 
The  children,  during  the  tender  years  of  infancy,  are  well 
fed  and  properly  taken  cure  of,  and  when  they  are  grown 
up  the  value  of  their  labor  greatly  overpays  their  mainten- 
ance. When  arrived  at  maturity  the  high  price  of  labor 
and  the  low  price  of  land  enable  them  to  establish  them- 
selves in  the  same  manner  as  their  fathers  did  before  them. 

In  other  countries  rent  and  profit  eat  up  wages,  and  the 
two  superior  orders  of  people  oppress  the  inferior  one.  But 
in  new  colonies  the  interest  of  the  two  superior  orders  obliges 
them  to  treat  the  inferior  one  with  more  generosity  and 
humanity ;  at  least,  where  that  inferior  one  is  not  in  a  state 
of  slavery.  Waste  lands,  of  the  greatest  natural  fertility, 
are  to  be  had  for  a  trifle.  The  increase  of  revenue  which 
tlie  proprietor,  who  is  always  the  undertaker,  expects  from 
their  improvement,  constitutes  his  profit;  which  in  these 
circumstances  is  commonly  very  great.  But  this  great  profit 
cannot  be  made  without  employing  the  labor  of  other  people 
in  clearing  and  cultivating  the  land;  and  the  disproportion 
between  the  great  extent  of  the  land  and  the  small  number 
of  the  people,  which  commonly  takes  place  in  new  colonies, 
makes  it  difficult  for  him  to  get  this  labor.  He  does  not, 
therefore,  dispute  about  wages,  but  is  willing  to  employ 
labor  at  any  price.  The  high  wages  of  labor  encourage 
population.  The  cheapness  and  plenty  of  good  land  encour- 
age improvement,  and  enable  the  proprietor  to  pay  those 
high  wages.  In  those  wages  consists  almost  the  whole  price 
of  the  land ;  and  though  they  are  high,  considered  as  the 


I 


5 


COLOSIAL  POLICY  OF  EUROPE. 


8 


wages  of  labor,  they  are  low,  considered  as  the  price  of  what 
is  80  very  valuable.  What  encourages  the  progress  of  popu- 
lation and  improvement  encourages  that  of  real  wealth  and 
greatness. 

The  progress  of  many  of  the  ancient  Greek  colonies 
towards  wealth  and  greatness  seems  accordingly  to  have 
boon  very  rapid.  In  the  course  of  a  century  or  two  several 
of  thom  appear  to  have  rivalled,  and  even  to  have  surpassed, 
their  mother  cities.  Syracuse  and  Agrigentum  in  S'oily, 
Tarcntum  and  Loeri  in  Italy,  Ephesus  and  Miletus  in  Lesser 
Asia,  appear  by  all  accounts  to  have  been  at  least  equal  to 
any  of  the  cities  of  ancient  Greece.  Though  posterior  in 
their  establishment,  yet  all  the  arts  of  refinement,  philoso- 
I)hy,  poetry,  and  eloquence,  seem  to  have  been  cultivated  as 
early,  and  to  have  been  improved  as  highly  in  them  as  in 
any  part  of  the  mother  country.  The  schools  of  the  two  old- 
est Greek  philosophers,  those  of  Thales  and  Pythagoras,  were 
established,  it  is  remarkable,  not  in  ancient  Greece,  but  the 
one  in  an  Asiatic,  the  other  in  an  Italian  colony.  All  those 
colonies  had  established  themselves  in  countries  inhabited 
l)y  savage  and  barbarous  nations,  who  easily  gave  place  to 
the  new  settlers.  They  had  plenty  of  good  land,  and  ns  they 
were  altogether  independent  of  the  mother  city,  they  were 
at  liberty  to  manage  their  own  affairs  in  the  way  that  they 
judired  was  most  suitable  to  their  own  interest. 

The  history  of  the  Roman  colonies  is  by  no  means  so  bril- 
liant. Some  of  them,  indeed,  such  as  Florence,  have  in  the 
course  of  many  ages,  and  after  the  fall  of  the  mother  city, 
jrrown  up  to  be  considerable  States.  But  the  progress  of  no 
one  of  them  seems  ever  to  have  been  very  rapid.  They  wei"© 
all  established  in  conquered  provinces,  which  in  most  cases 
had  been  fully  inhabited  before.  The  quantity  of  land  as- 
si<rned  to  each  colonist  was  seldom  very  considerable,  and, 
as  the  colony  was  not  independent,  they  were  not  always  at 
lil)orty  to  manage  their  own  affairs  in  the  way  that  they 
judged  was  most  suitable  to  their  own  interest. 

In  the  plenty  of  good  land  the  European  colonies  estab- 
lished in  America  and  the  West  Indies  resemble,  and  even 


ECONOMIC  HISTORY. 


greatly  surpass,  those  of  ancient  Greece.  In  their  depend- 
ency upon  the  mother  State  they  resemble  those  of  ancient 
Rome;  hut  their  great  distance  from  Europe  has  in  all  of 
them  alleviated  more  or  less  the  effects  of  this  dependency. 
Their  situation  has  placed  them  less  in  the  view  and  less  in 
the  power  of  their  mother  country.  In  pursuing  their  inter- 
est their  own  way,  their  conduct  has,  u[)ou  many  occasions, 
been  overlooked,  either  because  not  kn(jwn  or  not  under- 
stood in  Europe;  and  ujwn  some  occasions  it  has  been  fairly 
suffered  and  submitted  to,  because  their  distance  rendered 
it  difficult  to  restrain  it.  Even  the  violent  and  arbitrary 
government  of  Spain  has,  u[)ou  many  occasions,  been  obliged 
to  recall  or  soften  the  orders  which  had  been  given  for  the 
government  of  her  colonies,  for  fear  of  a  general  insurrection. 
The  progress  of  all  the  European  colonies  in  wealth,  popula- 
tion, and  improvement,  has  accordingly  been  very  great. 

The  crown  of  Spain,  by  its  share  of  the  gold  and  silver, 
derived  some  revenue  from  its  colonies  from  the  moment  of 
their  first  establishment.  It  was  a  revenue,  too,  of  a  nature 
to  excite  in  human  avidity  the  most  extravagant  expectations 
•of  still  greater  riches.  The  Spanish  colonies,  therefore, 
from  the  moment  of  their  first  establishment,  attracted  very 
much  the  attention  of  their  mother  country ;  while  those  of 
the  other  European  naticms  were  for  a  long  time  in  a  great 
measure  neglected.  The  former  did  not,  perhaps,  thrive 
the  better  in  consequence  of  this  attcnti(m,  nor  the  latter  the 
worse  in  consequence  of  this  neglect.  In  proportion  to  the 
extent  of  the  country  which  they  in  some  measure  |)ossess, 
the  Spanish  cohmies  are  considered  as  less  j)oi)ulous  and 
thriving  than  those  of  almost  any  other  European  nati  u 
The  progress  even  of  the  Spanish  colonies,  however,  in  \w\)\\- 
lation  and  improvement,  has  certainly  been  very  rapid  and 
very  great.  The  city  of  Lima,  founded  since  the  conquest, 
Is  represented  in  UUoa  as  containing  fifty  thousand  inhabit- 
ants near  thirty  years  ago.  Quito,  which  had  l)een  but  a 
miserable  hamlet  of  Indians,  is  represented  by  the  same 
author  as  in  his  time  equally  populous.  Oemelli  Carreri,  a 
pretended  traveller,  it  is  said,  indeed,  but  who  seems  every- 


■'      ?      •'•I'l 
i  ■  hi 


COLONIAL  POLICY  OF  EUROPE.  5 

where  to  have  written  upon  extreme  good  information, 
represents  the  city  of  Mexico  as  containing  a  hundred  thou- 
Siind  inhabitants,  — a  number  which,  in  spite  of  all  the  exag- 
<>^crations  of  the  Spanish  writers,  is  probably  more  than  live 
times  greater  than  what  it  contained  in  the  time  of  Monte- 
zuma. These  numbers  exceed  greatly  those  of  Boston,  New 
YiM'k,  and  Philadelphia,  the  three  greatest  cities  of  the 
Knglish  colonies.  Before  the  conquest  of  the  Spaniards 
there  were  no  cattle  tit  for  draught  either  in  Mexico  or  Peru. 
The  lama  was  their  only  beast  of  burden,  and  its  strength 
seems  to  have  been  a  good  deal  inferior  to  that  of  a  common 
ass.  TIio  plough  was  unknown  among  them.  They  were 
ignorant  of  the  use  of  iron.  They  had  no  coined  money,  nor 
any  established  instrument  of  commerce  of  any  kind.  Their 
commerce  was  carried  on  by  barter.  A  sort  of  wooden  spade 
was  their  principal  instrument  of  agriculture.  Sharp  stones 
served  them  for  knives  and  hatchets  to  cut  with ;  fish-bonea 
and  the  hard  sinews  of  certain  animals  served  them  for 
needles  to  sew  with;  and  these  seem  to  have  been  their 
principal  instruments  of  trade.  In  this  state  of  things,  it 
seems  impossible,  that  either  of  those  empires  could  havo 
been  so  much  improved  or  so  well  cultivated  as  at  pres- 
ent, when  they  are  plentifully  furnished  with  all  sorts  of 
European  cattle,  and  when  the  use  of  iron,  of  the  plough, 
and  of  many  of  the  arts  of  Europe,  has  been  introduced 
among  them.  But  the  populousness  of  every  country  must 
be  in  proportion  to  the  degree  of  its  improvement  and  culti- 
vation. In  spite  of  the  cniel  destruction  of  the  natives 
which  followed  the  conquest^  these  two  great  empires  are, 
jirobably,  more  populous  now  than  they  ever  were  before: 
and  the  people  ai"e  surely  very  different;  for  we  must  ac- 
knowledge, I  apprehend,  that  the  Spanish  Creoles  are  in 
many  respects  superior  to  the  ancient  Indians. 

After  the  settlements  of  the  Spaniards,  that  of  the  Portu- 
guese in  Brazil  is  the  oldest  of  any  European  nation  in  Amer- 
iea.  But  as  for  a  long  time  after  the  first  discovery  neither 
gold  nor  silver  mines  were  found  in  it,  and  as  it  afforded 
upon  that  account  little  or  no  revenue  to  the  crown,  it  was 


6 


ECONOMIC  HISTORY. 


for  a  long  time  in  a  great  measure  neglected;  and  during 
this  state  of  neglect  it  grew  up  to  be  a  great  and  powerful 
colony.  While  Portugal  was  under  the  dominion  of  Spain, 
Bra/Jl  was  attacked  by  the  Dutch,  who  got  possession  of 
seven  of  the  fourteen  provinces  into  which  it  is  divided. 
They  expected  soon  to  conquer  the  other  seven,  when  Portu- 
gal recovered  its  independency  by  the  elevation  of  the  family 
of  Braganza  to  the  throne.  The  Dutch  then,  as  enemies  to 
the  Spaniards,  became  friends  to  the  Portuguese,  who  were 
lilicwise  the  enemies  of  the  Sjjaniarda.  They  agreed,  there- 
fore, to  leave  that  i)art  of  Brazil  which  they  had  not  con- 
quered to  the  king  of  Portugal,  who  agreed  to  leave  that  part 
which  they  had  conquered  to  them,  as  a  matter  not  worth 
disputing  about  with  such  good  allies.  But  the  Dutch 
government  soon  began  to  oppress  the  Portuguese  colonists, 
who,  instead  of  amusing  themselves  with  complaints,  took 
arms  against  their  new  masters,  and  by  their  own  valor  and 
resolution,  with  the  connivance  indeed,  but  without  any 
avowed  assistance  from  the  mother  country,  drove  them  out 
of  Brazil.  The  Dutch,  therefore,  finding  it  impossible  to  keep 
any  part  of  the  country  to  themselves,  were  contented  that 
it  should  be  entirely  restored  to  the  crown  of  Portugal.  lu 
this  colony  there  are  said  to  be  more  than  six  hundred  thou- 
sand people,  either  Portuguese  or  descended  from  Portuguese, 
Creoles,  mulattoos,  and  a  mixed  race  between  Portuguese  and 
Brazilians.  No  one  colony  in  America  is  supposed  to  contain 
so  great  a  number  of  people  of  European  extraction. 

Towards  the  end  of  the  fifteenth,  and  during  the  greater 
part  of  the  sixteenth  century,  Spain  and  Portugal  were  the 
two  great  naval  powers  upon  the  ocean ;  for  though  the  com- 
merce of  Venice  extended  to  every  part  of  Europe,  its  fleets 
had  scarce  ever  sailed  beyond  the  Mediterranean.  The  Span- 
iards, in  virtue  of  the  first  discovery,  claimed  all  America 
as  their  own;  and  though  they  could  not  hinder  so  great  a 
naval  power  as  that  of  Portugal  from  settling  in  Brazil,  such 
was  at  that  time  the  terror  of  their  name  that  the  greater 
part  of  the  other  nations  of  Europe  were  afraid  to  establish 
themselves  in  any  other  part  of  that  great  continent.     The 


COLONIAL  POLICY  OF  EUROPE. 


French  who  attempted  to  settle  in  Florida  were  all  mur- 
dered hy  the  Spaniards.  But  the  declension  of  the  naval 
power  of  this  latter  nation,  in  consequence  of  the  defeat  or 
misL'arria«i:e  of  what  they  called  their  Invincible  Armada, 
which  hai>|»ened  towards  the  end  of  the  sixteenth  century, 
put  it  out  of  their  power  to  obstruct  any  longer  the  settle- 
ments of  the  other  European  nations.  In  the  course  of  the 
seventeenth  century,  therefore,  the  English,  French,  Dutch, 
Danes,  and  Swedes,  all  the  great  nations  who  had  any  ports 
upon  the  ocean,  attempted  to  make  some  settlements  in  the 
new  world. 

The  Swedes  established  themselves  in  New  Jersey;  and 
the  number  of  Swedish  families  still  to  be  found  there  suffi- 
ciently demonstrates  that  this  colony  was  very  likely  to 
prosper  had  it  been  protected  by  the  mother  country.  But 
being  neglected  by  Sweden  it  was  soon  swallowed  up  by  the 
Dutch  colony  of  New  York,  which  again,  in  1674,  fell  under 
the  dominion  of  the  English. 

The  small  islands  of  St.  Thomas  and  Santa  Cruz  are  the 
only  countries  in  the  new  world  that  have  ever  been  pos- 
sessed by  the  Danes.  These  little  settlements  too  were 
under  the  government  of  an  exclusive  company,  which  had 
the  sole  right  both  of  purchasing  the  surplus  produce  of  the 
colonists  and  of  supplying  them  with  such  goods  of  other 
countries  as  they  wanted,  and  which,  therefore,  both  in  its 
purchases  and  sales,  had  not  only  the  power  of  oppressing 
them,  l)ut  the  greatest  temptation  to  do  so.  The  government 
of  an  exclusive  company  of  merchants  is,  perhaps,  the  worst 
of  all  governments  for  any  country  whatever.  It  was  not, 
however,  able  to  stop  altogether  the  progress  of  these  colo- 
nics, though  it  rendered  it  more  slow  and  languid.  The 
late  king  of  Denmark  dissolved  this  company,  and  since  that 
time  the  prosperity  of  these  colonies  has  been  very  great. 

The  Dutch  settlements  in  the  West,  as  well  as  those  in  the 
East  Indies,  were  originally  put  under  the  government  of  an 
exclusive  company.  The  progress  of  some  of  them,  there- 
fore, though  it  has  been  considerable,  in  comparison  with 
that  of  almost  any  country  that  has  been  long  peopled  and 


8 


ECONOMIC  HISTORY. 


established,  has  been  languid  and  slow  in  comparison  with 
that  of  the  greater  part  of  new  colonies.  The  colony  of 
Surinam,  though  very  considerable,  is  still  inferior  to  the 
greater  part  of  the  sugar  colonies  of  the  other  European 
natichs.  The  colony  of  Nova  Belgia,  now  divided  into  the 
two  provinces  of  New  York  and  New  Jersey,  would  probably 
have  soon  become  considerable  too,  even  though  it  had  re- 
mained under  the  government  of  the  Dutch.  The  plenty  and 
cheapness  of  good  land  are  such  powerful  causes  oi  prosper- 
ity that  the  very  worst  government  is  scarce  capable  of 
checking  altogether  the  efficacy  of  their  operation.  The 
great  distance  too  from  the  mother  country  would  enable  the 
colonists  to  evade  more  or  less,  by  smuggling,  the  monopoly 
which  the  company  enjoyed  against  them.  At  present  the 
company  allows  all  Dutch  s'  ips  to  trade  to  Surinam  upon 
paying  two  and  a  half  per  cent  upon  the  value  of  their  cargo 
for  a  license;  and  only  reserves  to  itself  exclusively  the  di- 
rect trade  from  Africa  to  America,  which  consists  almost 
entirely  in  the  slave  trade.  This  relaxation  in  the  exclu- 
sive privileges  of  the  company  is  probably  the  principal  cause 
of  that  degree  of  prosperity  which  that  colony  at  present 
enjoys.  Curagoa  and  Eustatia,  the  two  principal  islands 
belonging  to  the  Dutch,  are  free  ports  open  to  the  ships  of 
all  nations;  and  this  freedom,  in  the  midst  of  better  colo- 
nies whose  ports  are  open  to  those  of  one  nation  only,  has 
been  the  great  cause  of  the  prosperity  of  those  two  barren 
islands. 

The  French  colony  of  Canada  was,  during  the  greater 
part  of  the  last  century,  and  some  part  of  the  present,  under 
the  government  of  an  exclusive  company.  Under  so  unfav- 
orable an  administration  its  progress  was  necessarily  very 
slow  in  comparison  with  that  of  other  new  colonies;  but  it  be- 
came much  more  rapid  when  this  company  was  dissolved  after 
the  fall  of  what  is  called  the  Mississippi  scheme.  When  the 
English  got  possession  of  this  country  they  found  in  it  near 
double  the  number  of  inhabitants  which  Father  Charlevoix 
had  assigned  to  it  between  twenty  and  thirty  years  before. 
That  Jesuit  had  travelled  over  the  whole  country,  and  had 


COLONIAL  POLICY  OF  EUROPE. 


9 


no  inclination  to  represent  it  as  less  considerable  than  it 
really  was. 

The  French  colony  of  St.  Domingo  was  established  by 
pirates  and  freebooters,  who  for  a  long  time  neither  re- 
quired the  protection  nor  acknowledged  the  authority  of 
France ;  and  when  that  race  of  banditti  became  so  far  citi- 
zens as  to  acknowledge  this  authority,  it  was  for  a  long  time 
necessary  to  exercise  it  with  very  great  gentleness.  During 
this  period  the  population  and  improvement  of  this  colony 
increased  very  fast.  Even  the  oppression  of  the  exclusive 
company,  to  which  it  was  for  some  time  subjected,  with  all 
the  other  colonies  of  France,  though  it  no  doubt  retarded, 
had  not  been  able  to  stop  its  progress  altogether.  The 
course  of  its  prosperity  returned  as  soon  as  it  was  relieved 
from  that  oppression.  It  is  now  the  most  important  of  the 
sugar  colonies  of  the  West  Indies,  and  its  produce  is  said  to 
be  greater  than  that  of  all  the  English  sugar  colonies  put  to- 
gether. The  other  sugar  colonies  of  France  are  in  general 
all  very  thriving. 

But  there  are  no  colonies  of  which  the  progress  has  been 
more  rapid  than  that  of  the  English  in  North  America. 

Plenty  of  good  land  and  liberty  to  manage  their  own 
I  affairs  their  own  way,  seem  to  be  the  two  great  causes  of  the 
[prosperity  of  all  new  colonies. 

In  the  plenty  of  good  land,  the  English  colonies  of  North 
[America,  though  no  doubt  very  abundantly  provided,  are, 
however,  inferior  to  those  of  the  Spaniards  and  Portuguese, 
land  not  superior  to  some  of  those  possessed  by  the  French 
Ibefore  the  late  war.  But  the  political  institutions  of  the 
jEnglish  colonies  have  been  more  favorable  to  the  improve- 
jmcnt  and  cultivation  of  this  land  than  those  of  any  of  the 
lother  three  nations. 

First,  the  engrossing  of  uncultivated  land,  though  it  has 
l)y  no  means  been  prevented  altogether,  has  been  more  re- 
strained in  the  English  colonies  than  in  any  other.  The 
3olony  law  which  imposes  upon  every  proprietor  the  obliga- 
tion of  improving  and  cultivating,  within  a  limited  time,  a 
certain  proportion  of  his  lands,  and  which,  in  case  of  failure, 


i»-  ''•*?. 


10 


ECONOMIC  HISTORY. 


declares  those  neglected  lands  grantablc  to  any  other  person, 
though  it  has  not,  perhaps,  been  very  strictly  executed,  has, 
however,  had  some  effect. 

Secondly,  in  Pennsylvania  there  is  no  right  of  primogeni- 
ture, and  lands,  like  movables,  are  divided  equally  among 
all  the  children  of  the  family.  In  three  of  the  provinces  of 
New  England  the  oldest  has  only  a  double  share,  as  in  the 
Musaical  law.  Though  in  those  provinces,  therefore,  too 
great  a  quantity  of  land  should  sometimes  be  engrossed  by 
a  particular  individual,  it  is  likely,  in  the  course  of  a  genera- 
tion or  two,  to  be  sufficiently  divided  again.  In  the  other 
English  colonies,  indeed,  the  right  of  primogeniture  takes 
place,  as  in  the  law  of  England.  But  in  all  the  English 
colonies  the  tenure  of  the  lands,  which  are  all  held  by  free 
socage,  facilitates  alienation,  and  the  grantee  of  any  exten- 
sive tract  of  land  generally  finds  it  for  his  interest  to  alien- 
ate, as  fast  as  he  can,  the  greater  part  of  it,  reserving  only 
a  small  quit-rent.  In  the  Spanish  and  Portuguese  colonics, 
what  is  called  the  right  of  Majorazzo^  takes  place  in  the 
succession  of  all  those  great  estates  to  which  any  title  of 
honor  is  annexed.  Such  estates  go  all  to  one  person,  and 
are  in  effect  entailed  and  unalienable.  The  French  colonics, 
indeed,  are  subject  to  the  custom  of  Paris,  which,  in  the  in- 
heritance of  land,  is  much  more  favorable  to  the  younger 
children  than  the  law  of  England.  But,  in  the  French  colo- 
nies, if  any  part  of  an  estate  held  by  the  noble  tenure  of 
chivalry  and  homage  is  alienated,  it  is  for  a  limited  time 
subject  to  the  right  of  redemption,  either  by  the  heir  of  the 
superior  or  by  the  heir  of  the  family ;  and  all  the  largest 
estates  of  the  country  are  held  by  such  noble  tenures,  which 
necessarily  embarrass  alienation.  But  in  a  new  colony  a 
great  uncultivated  estate  is  likely  to  be  much  more  speedily 
divided  by  alienation  than  by  succession.  The  plenty  and 
cheapness  of  good  land,  it  has  already  been  observed,  are  the  i 
principal  causes  of  the  rapid  prosperity  of  new  colonies. 
The  engrossing  of  land,  in  effect,  destroys  this  plenty  and 
cheapness.     The  engrossing  of  uncultivated  land,  besides,  is 

1  Jus  Msjoratus. 


COLONIAL  POLICY  OF  EUROPE. 


u 


the  greatest  obstruction  to  its  improvement.  But  the  labor 
that  is  employed  in  the  improvement  and  cultivation  of  land 
affords  the  greatest  and  most  valuable  produce  to  the  society. 
The  produce  of  labor  in  this  case  pays  not  only  its  own 
wages,  and  the  profit  of  the  stock  which  employs  it,  but  the 
rent  of  the  land  too  upon  which  it  is  employed.  The  labor 
ot  the  English  colonists,  therefore,  being  more  employed  in 
the  improvement  and  cultivation  of  land,  is  likely  to  afford 
a  greater  and  more  valuable  produce  than  that  of  any  of 
the  other  three  nations,  which  by  the  engrossing  of  land  is 
more  or  less  diverted  toward  other  employments. 

Thirdly,  the  labor  of  the  English  colonists  is  not  only 
likely  to  afford  a  greater  and  more  valuable  produce,  but,  in 
consequence  of  the  moderation  of  their  taxes,  a  greater  pro- 
portion of  this  produce  belongs  to  themselves,  which  they 
may  store  up  and  employ  in  putting  into  motion  a  still  greater 
quantity  of  labor.  The  English  colonists  have  never  yet 
contributed  anything  towards  the  defence  of  the  mother  coun- 
try, or  towards  the  support  of  its  civil  government.  They 
themselves,  on  the  contrary,  have  hitherto  been  defended  al- 
most entirely  at  the  expense  of  the  mother  country.  But  the 
expense  of  fleets  and  armies  is  out  of  all  proportion  greater 
than  the  necessary  expense  of  civil  government.  The  ex- 
pense of  their  own  civil  government  has  always  been  very 
moderate.  It  has  generally  been  confined  to  what  was  neces- 
sary for  paying  competent  salaries  to  the  governor,  to  the 
judges,  and  to  some  other  officers  of  police,  and  for  main- 
taining a  few  of  the  most  useful  public  works.  The  expense 
of  tlic  civil  establishment  of  Massachusetts  Bay,  before  the 
j  commencement  of  the  present  disturbances,  used  to  be  but 
about  £18,000  a  year;  that  of  New  Hampshire  and  Rhode 
j  Island,  £3,500  each;  that  of  Connecticut,  £4,000;  that  of 
jNew  York  and  Pennsylvania,  £4,500  each;  that  of  New 
Jersey,  £1,200;  that  of  Virginia  and  South  Carolina,  £8,000 
each.  The  civil  establishments  of  Nova  Scotia  and  Georgia 
are  partly  supported  by  an  annual  grant  of  Parliament. 
But  Nova  Scotia  pays,  besides,  about  £7,000  a  year  to- 
[wards  the  public  expenses  of  the  colony ;  and  Georgia  about 


I 


1i 


12 


ECONOMIC  H  J  STORY. 


£2,500  a  year.  All  the  different  civil  establishments  in 
North  America,  in  short,  exclusive  of  those  of  Maryland  and 
North  Carolina,  of  which  no  exact  account  has  been  got,  did 
not,  before  the  commencement  of  the  present  disturbances, 
cost  the  inhabitants  above  £64,700  a  year,  —  an  ever-memo- 
rable example  at  how  small  an  expense  three  millions  of 
people  may  not  only  be  governed,  but  well  governed.  The 
most  important  part  of  the  expense  of  government,  indeed, 
that  of  defence  and  protection,  has  constantly  fallen  upon 
the  mother  country.  The  ceremonial,  too,  of  the  civil  gov- 
ernment in  the  colonies,  upon  the  reception  of  a  new  gov- 
ernor, upon  the  opening  of  a  new  assembly,  etc.,  though 
sufficiently  decent,  is  not  accompanied  with  any  expensive 
pomp  or  parade.  Their  ecclesiastical  government  is  con- 
ducted upon  a  plan  equally  frugal.  Tithes  are  unknown 
among  them;  and  their  clergy,  who  are  far  from  being 
numerous,  are  maintained  either  by  moderate  stipends,  or  by 
the  voluntary  contributions  of  the  people.  The  power  of 
Spain  and  Portugal,  on  the  contrary,  derives  some  support 
from  the  taxes  levied  upon  their  colonies.  France,  indeed, 
has  never  drawn  any  considerable  revenue  from  its  colonies, 
the  taxes  which  it  levies  upon  them  being  generally  spent 
among  them.  But  the  colony  government  of  all  these  three 
nations  is  conducted  upon  a  much  more  expensive  plan,  and 
is  accompanied  with  a  much  more  expensive  ceremonial.  The 
sums  spent  upon  the  reception  of  a  new  viceroy  of  Peru,  for 
example,  have  frequently  been  enormous.  Such  ceremonials 
are  not  only  real  taxes  paid  by  the  rich  colonists  upon  those 
particular  occasions,  but  they  serve  to  introduce  among  them 
the  habit  of  vanity  and  expense  upon  all  other  occasions. 
They  are  not  only  very  grievous  occasional  taxes,  but  they 
contribute  to  establish  perpetual  taxes  of  the  same  kind  still 
more  grievous,  —  the  ruinous  taxes  of  private  luxury  and  ex- 
travagance. In  the  colonies  of  all  those  three  nations, 
too,  the  ecclesiastical  government  is  extremely  oppressive. 
Tithes  take  place  in  all  of  them,  and  are  levied  with  thei 
utmost  rigor  in  those  of  Spain  and  Portugal.  All  of  them, 
besides,  are  oppressed  with  a  numerous  race  of  mendicant  I 


COLONIAL  POLICY  OF  EUROPE. 


18 


friars  whose  beggary,  being  not  only  licensed  but  consecrated 

jby  religion,  is  a  most  grievous  tax  upon  the  poor  people, 

who  arc  most  carefully  taught  that  it  is  a  duty  to  give,  and 

I  a  very  great  sin  to  refuse  them  their  charity.     Over  and 

above  all  this,  the  clergy  are,  in  all  of  them,  the  greatest 

I  engrossers  of  land. 

Fourthly,  in  the  disposal  of  their  surplus  produce,  or  of 
[what  is  over  and  above  their  own  consumption,  the  English 
colonies  have  been  more  favored,  and  have  been  allowed  a 
more  extensive  market,  than  those  of  any  other  European  na- 
jtion.  Every  European  nation  has  endeavored,  more  or  less, 
Ito  monopolize  to  itself  the  commerce  of  its  colonies,  and  upon 
jthat  account  has  prohibited  the  ships  of  foreign  nations  from 
[trading  to  them,  and  has  prohibited  them  from  importing  Eu- 
Iropcan  goods  from  any  foreign  nation.  But  the  manner  in 
Iw-hich  this  monopoly  has  been  exercised  in  different  nations 
[has  been  very  different. 

Some  nations  have  given  up  the  whole  commerce  of  their 
colonics  to  an  exclusive  company,  of  whom  the  colonies  were 
|obligcd  to  buy  all  such  European  goods  as  they  wanted,  and 
to  whom  they  were  obliged  to  sell  the  whole  of  their  own 
jurplus  produce.  It  was  the  interest  of  the  company,  there- 
fore, not  only  to  sell  the  former  as  dear,  and  to  buy  the  latter 
18  cheap  as  possible,  but  to  buy  no  more  of  the  latter,  even 
it  this  low  price,  than  what  they  could  dispose  of  for  a  very 
ligh  price  in  Europe.  It  was  therr  interest  not  only  to 
lograde  in  all  cases  the  value  of  the  surplus  produce  of  the 
colony,  but  in  many  cases  to  discourage  and  keep  down  the 
latural  increase  of  its  quantity.  Of  all  the  expedients  that 
can  well  be  contrived  to  stunt  the  natural  growth  of  a  new 
colony,  that  of  an  exclusive  company  is  undoubtedly  the 
lost  effectual.  This,  however,  has  been  the  policy  of  Hol- 
land, though  their  company,  in  the  course  of  the  present 
pcntury,  has  given  up  in  many  respects  the  exertion  of  their 
exclusive  privilege.  This,  too,  was  the  policy  of  Denmark 
[ill  the  reign  of  the  late  king.  It  has  occasionally  been  the 
policy  of  France,  and  of  late,  since  1755,  after  it  had  been 
Abandoned  by  all  other  nations  on  account  of  its  absurdity, 


14 


ECONOMIC  HISTORY. 


1:1 


it  has  becomo  tho  policy  of  Portugal  with  regard  at  least  to 
two  of  tho  principal  provinces  of  Brazil,  Pornambuco  and 
Marannon. 

Other  nations,  without  establishing  an  exclusive  company, 
have  confined  the  whole  commerce  of  their  colonics  to  a  par- 
ticular port  of  tho  mother  country,  from  whence  no  ship  wag 
allowed  to  sail  but  either  in  a  fleet,  and  at  a  particular  sea- 
son, or,  if  single,  in  consequence  of  a  particular  license, 
which  in  most  cases  was  very  well  paid  for.     This  policy 
opened,  indeed,  the  trade  of  the  colonies  to  all  the  natives  uf 
the  mother  country,  provided  thoy  traded  from  the  proper  port, 
at  the  proper  season,  and  in  the  proper  vessels.    But  as  all 
the  different  merchants  who  joined  their  stocks  in  order  to  fit 
out  those  licensed  vessels  would  find  it  for  their* interest  toj 
act  in  concert,  the  trade  which  was  carried  on  in  this  manner 
would  necessarily  be  conducted  very  nearly  upon  the  same 
principles  as  that  of  an  exclusive  company.     The  profit  of| 
those  merchants  would  be  almost  equally  exorbitant  and  op- 
pressive.   The  colonies  would  be  ill  supplied  and  would  Im  | 
obliged  both  to  buy  very  dear  and  to  sell  very  cheap.     This, 
however,  till  within  these  few  years,  had  always  been  the  pol- 
icy of  Spain ;  and  the  price  of  all  European  goods,  accordingly, 
is  said  to  have  been  enormous  in  the  Spanish  West  Indies. 
At  Quito,  wo  are  told  by  Ulloa,  a  pound  of  iron  sold  for  about] 
four  and  sixpence,  and  a  pound  of  steel  for  about  six  and  nine- 
pence  sterling.     But  it  is  chiefly  in  order  to  purchase  Euro-| 
pean  goods  that  the  colonies  part  with  their  own  produce. 
The  more,  therefore,  they  pay  for  the  one,  the  less  they  really  I 
get  for  the  other,  and  the  dearness  of  the  one  is  the  same  thing 
with  the  cheapness  of  the  other.     The  policy  of  Portugal  is 
in  this  respect  the  same  as  the  ancient  policy  of  Spain,  with 
regard  to  all  its  colonies  except  Pornambuco  and  Marannon,  [ 
and  with  regard  to  these  it  has  lately  adopted  a  still  worse. 

Other  nations  leave  the  trade  of  their  colonies  free  to  all  I 
their  subjects,  who  may  carry  it  on  from  all  the  different  ports  | 
of  the  mother  country,  and  who  have  occasion  for  no  other  li- 
cense than  the  common  dispatches  of  the  custom-house.    In  I 
this  case  the  number  and  dispersed  situation  of  the  different 


COLONIAL  POLICY  OF  EUROPE. 


16 


traders  render  it  iinpoggiblo  for  them  to  enter  into  any  gen- 
eral combinution,  and  their  competition  is  sufficient  to  hinder 
them  from  malting  very  exorbitant  profits.  Under  so  literal  a 
policy  the  colonies  are  enabled  both  to  sell  tlieir  own  produce 
and  to  buy  the  goods  of  Europe  at  a  reasonable  price.  But 
since  the  dissolution  of  the  Plymouth  company,  when  our  col- 
onics were  but  in  their  infancy,  this  has  always  been  the  pol- 
icy of  England.  It  has  generally  too  been  that  of  France,  and 
hns  been  uniformly  so  since  the  dissolution  of  what,  in  Eng- 
land, is  commonly  called  their  Mississippi  company.  The 
profits  of  the  trade,  therefore,  which  Franco  and  England 
carry  on  with  their  colonies,  though  no  doubt  eomewhat 
higher  than  if  the  competition  was  free  to  all  other  nations, 
are,  however,  by  no  means  exorbitant ;  and  the  price  of  Eu- 
ropean goods  accordingly  is  not  extravagantly  high  in  the 
greater  part  of  the  colonics  of  either  of  those  nations. 

In  the  exportation  of  their  own  surplus  produce  too,  it  is 
only  with  regard  to  certain  commodities  that  the  colonies  of 
Great  Britain  are  confined  to  the  market  of  the  mother  coun- 
try. These  commodities,  having  been  enumerated  in  the  act 
of  navigation  and  in  some  other  subsequent  acts,  have  upon 
that  account  been  called  enumerated  commodities.  The  rest 
are  called  non-enumerated;  and  may  be  exported  directly  to 
other  counties,  provided  it  is  in  British  or  Plantation  ships, 
of  which  the  owners  and  three  fourths  of  the  mariners  are 
British  subjects. 

Among  the  non-enumerated  commodites  are  some  of  the 
most  important  productions  of  America  and  the  West  Indies : 
grain  of  all  sorts,  lumber,  salt  provisions,  fish,  sugar,  and 
rura. 

Grain  is  naturally  the  first  and  principal  object  of  the 
culture  of  all  new  colonies.  By  allowing  them  a  very  exten- 
sive market  for  it,  the  law  encourages  them  to  extend  this 
culture  much  beyond  the  consumption  of  a  thinly  inhabited 
country,  and  thus  to  provide  beforehand  an  ample  subsist- 
ence for  a  continually  increasing  population. 

In  a  country  quite  covered  with  wood,  where  timber  conse- 
quently is  of  little  or  no  value,  the  expense  of  clearing  the 


16 


ECONOMIC  HISTORY. 


ground  is  the  principal  obstacle  to  improvement.  By  allow- 
ing the  colonics  a  very  extensive  market  for  their  lumber,  the 
law  endeavors  to  facilitate  improvement  by  raising  the  price 
of  a  commodity  which  would  otherwise  be  of  little  value,  and 
thereby  enabling  them  to  make  some  profit  of  what  would 
otherwise  be  mere  expense. 

In  a  country  neither  half-peopled  nor  half-cultivated,  cattle 
naturally  multiply  beyond  the  consumption  of  the  inhabi- 
tants, and  are  often  upon  that  account  of  little  or  no  value. 
But  it  is  necessary,  it  has  already  been  shown,  that  the  price 
of  cattle  should  bear  a  certain  proportion  to  that  of  corn 
before  the  greater  part  of  the  lands  of  any  country  can  be 
improved.  By  allowing  to  American  cattle,  in  all  shapes, 
dead  and  alive,  a  very  extensive  market,  the  law  endeavors  to 
raise  the  value  of  a  commodity  of  which  the  high  price  is  so 
very  essential  to  improvement.  The  good  effects  of  this 
liberty,  however,  must  be  somewhat  diminished  by  the  4th 
of  George  III.,  c.  15,  which  puts  hides  and  skins  among  the 
enumerated  commodities,  and  thereby  tends  to  reduce  the 
valuation  of  American  cattle. 

To  increase  the  shipping  and  naval  power  of  Great 
Britain  by  the  extension  of  the  fisheries  of  our  colonies  is 
ail  object  which  the  legislature  seems  to  have  had  almost 
constantly  in  view.  Those  fisheries  upon  this  account  have 
had  all  the  encouragement  which  freedom  can  give  them,  and 
they  have  flourished  accordingly.  The  New  England  fishery 
in  particular  was,  before  the  late  disturbances,  one  of  the 
most  important,  perhaps,  in  the  world.  The  whale-fishery, 
which,  notwithstanding  an  extravagant  bounty,  is  in  Great 
Britain  carried  on  to  so  little  purpose  that,  in  the  opinion 
of  many  people  (which  I  do  not,  however,  pretend  to  war- 
rant), the  whole  produce  does  not  much  exceed  the  value  of 
the  bounties  which  are  annually  paid  for  it,  is  in  New  Eng- 
land carried  on  without  any  bounty  to  a  very  great  extent. 
Fish  is  one  of  the  principal  articles  with  which  the  North 
Americans  trade  to  Spain,  Portugal,  and  the  Mediterranean. 

Sugar  was  originally  an  enumerated  commodity  which 
could  be  exported  only  to  Great  Britian.     But  in  1731,  upon 


COLONIAL  POLICY  OF  EUROPE. 


17 


a  representation  of  the  sugar-planters,  its  exportation  was 
permitted  to  all  j)arts  of  the  world.  The  restrictions,  how- 
ever, with  which  this  liberty  was  granted,  joined  to  the  high 
price  of  sugar  in  Great  Britain,  have  rendered  it  in  a  great 
measure  ineffectual.  Great  Britain  and  her  colonics  still 
continue  to  h\i  almost  the  sole  market  for  all  the  sugar  pro- 
duced in  the  British  plantations.  Their  consumption  in- 
creases so  fast  that,  though  in  consequence  of  the  increasing 
improvement  of  Jamaica,  as  well  as  of  the  Ceded  Islands, 
the  importation  of  sugar  has  increased  very  greatly  within 
these  twenty  years,  the  exportation  to  foreign  countries  is 
said  to  be  not  mach  greater  than  before. 

Rum  is  a  very  important  article  in  the  trade  which  the 
Americans  carry  on  to  the  coast  of  Africa,  from  which  they 
bring  baclc  negro  slaves  in  return. 

If  the  whole  surjdus  produce  of  America  in  grain  of  all 
sorts,  in  salt  provisions,  and  in  fish,  had  been  put  into  the 
enumeration,  and  thereby  forced  into  the  market  of  Great 
Britain,  it  would  have  interfered  too  much  with  the  produce 
of  the  industry  of  our  own  people.  It  was  probably  not  so 
much  from  any  regard  to  the  interest  of  America,  as  from 
a  jealousy  of  this  interference,  that  those  important  com- 
modities have  not  only  been  kept  out  of  the  enumeration, 
hut  that  the  importation  into  Great  Britain  of  all  grain,  ex- 
cept rice,  and  of  all  salt  provisions,  has,  in  the  ordinary 
state  of  the  law,  been  prohibited. 

The  non-enumerated  commodities  could  originally  be  cx- 
jioitcd  to  all  parts  of  the  world.  Luml)cr  and  rice,  hav- 
ing been  once  put  into  the  enumeration,  when  they  were 
afterwards  taken  out  of  it  were  confined,  as  to  the  European 
market,  to  the  countries  that  lie  south  of  Cape  Finisterre. 
I>y  tlie  6th  of  George  III.,  c.  62,  all  non-enumerated  com- 
modities were  subjected  to  the  like  restriction.  The  i)art8  of 
Euiope  which  lie  south  of  Cape  Finisterre  arc  not  manufac- 
turing countries,  and  we  were  less  jealous  of  the  colony  ships 
carrying  home  from  them  any  manufactures  which  could 
1  interfere  with  our  own. 

The  enumerated  commodities  are  of  two  sorts :  first,  such 


I 


18 


ECONOMIC  HISTORY. 


as  are  either  the  peculiar  produce  of  America,  or  as  cannot 
be  produced,  or  at  least  are  not  produced,  in  the  mother 
country.  Of  this  kind  are  molasses,  coffee,  cocoanuts,  to- 
bacco, pimento,  ginger,  whale-fins,  raw  silk,  cotton- wool, 
beaver  and  other  peltry  of  America,  indigo,  fustic,  and 
other  dyeing  woods.  Secondly,  such  as  are  not  the  peculiar 
produce  of  America,  but  which  are  and  may  be  produced  in 
the  mother  country,  though  not  in  such  quantities  as  to  sup- 
ply the  greater  part  of  her  demand,  which  is  principally  sup- 
plied from  foreign  countries.  Of  this  kind  are  all  naval 
stores,  masts,  yards,  and  bowsprits,  tar,  pitch,  and  turpen- 
tine, pig  and  bar  iron,  copper  ore,  hides  and  skins,  pot  and 
pearl  ashes.  The  largest  importation  of  commodities  of  the 
first  kind  could  not  discourage  the  growth  or  interfere  with 
the  sale  of  any  part  of  the  produce  of  the  mother  coimtry. 
By  confining  them  to  the  home  market,  our  merchants,  it 
was  expected,  would  not  only  be  enabled  to  buy  them  cheaper 
in  the  Plantations,  and  consequently  to  sell  them  with  a 
better  profit  at  home,  but  to  establish  between  the  Planta- 
tions and  foreign  countries  an  advantageous  carrying  trade, 
of  which  Great  Britain  was  necessarily  to  be  the  centre  or 
emporium,  as  the  European  country  into  which  those  com- 
modities were  first  to  be  imported.  The  importation  of 
commodities  of  the  second  kind  might  be  so  managed  too,  it 
was  supposed,  as  to  interfere,  not  with  the  sale  of  those  of 
the  same  kind  which  were  produced  at  home,  but  with  that 
of  those  which  were  imported  from  foreign  countries;  be- 
cause, by  means  of  proper  duties,  they  might  be  rendered 
always  somewhat  dearer  than  the  former,  and  yet  a  good 
deal  cheaper  than  the  latter.  By  confining  such  commod- 
ities to  the  home  market,  therefore,  it  was  proposed  to  dis- 
courage the  produce,  net  of  Great  Britain,  but  of  some 
foreign  countries  with  which  the  balance  of  trade  was  be- 
lieved to  be  unfavorable  to  Great  Britain. 

The  prohibition  of  exporting  from  the  colonies  to  any 
other  country  but  Great  Britain  masts,  yards,  and  bow- 
sprits, tar,  pitch,  and  turpentine  naturally  tended  to  lower 
the  price  of  timber  in  the  colonies,  and  consequently  to  in- 


COLONIAL  POLICY  OF  EUROPE. 


19 


crease  the  expense  of  clearing  their  lands,  the  principal 
obstacle  to  their  improvement.  But  about  the  beginning  of 
the  present  century,  in  1703,  the  pitch  and  tar  company  of 
Sweden  endeavored  to  raise  the  price  of  their  commodities 
to  Great  Britain  by  prohibiting  their  exportation,  except  in 
their  own  ships,  at  their  own  price,  and  in  such  quantities  as 
tlioy  thought  proper.  In  order  to  counteract  this  notable 
piece  of  mercantile  policy,  and  to  render  herself  as  much  as 
l»os8ible  independent,  not  only  of  Sweden,  but  of  all  the  other 
northern  powers,  Great  Britain  gave  a  bounty  upon  the  im- 
portation of  naval  stores  from  America,  and  the  effect  of 
this  bounty  was  to  raise  the  price  of  timber  in  America 
much  more  than  the  confinement  to  the  home  market  could 
lower  it ;  and  as  both  regulations  were  enacted  at  the  same 
time,  their  joint  effect  was  rather  to  encourage  than  to  dis- 
courage the  clearing  of  land  in  America. 

Though  pig  and  bar  iron  too  have  been  put  among  the 
enumerated  commodities,  yet  as,  when  imported  from  Amer- 
ica, they  are  exempted  from  considerable  duties  to  which 
they  are  subject  when  imported  from  any  other  country,  the 
one  part  of  the  regulation  contributes  more  to  encourage  the 
erection  of  furnaces  in  America,  than  the  other  to  discourage 
it.  There  is  no  manufacture  which  occasions  so  great  a  con- 
sumption of  wood  as  a  furnace,  or  which  can  contribute  so 
much  to  the  clearing  of  a  country  overgrown  with  it. 

Tlie  tendency  of  some  of  these  regulations  to  raise  the 
vahie  of  timber  in  America,  and  thereby  to  facilitate  the 
clearing  of  the  land,  was  neither,  perhaps,  intended  nor 
understood  by  the  legislature.  Though  their  beneficial 
effects,  however,  have  been  in  this  respect  accidental,  they 
have  not  upon  that  account  been  less  real. 

Tlie  most  perfect  freedom  of  trade  is  permitted  between 
tlic  British  colonies  of  America  and  the  West  Indies,  both 
in  the  enumerated  and  in  the  non-enumerated  commodities. 
Those  colonies  are  now  become  so  populous  and  thriving 
that  each  of  them  finds  in  some  of  the  others  a  great  and  ex- 
tensive market  for  every  part  of  its  produce.  All  of  them 
taken  together,  they  make  a  great  internal  market  for  the 
produce  of  one  another. 


20 


ECONOMIC  HISTORY. 


The  liberality  of  England,  however,  towards  the  trade  of 
her  colonics  has  been  confined  chiefly  to  what  concerns  the 
market  for  their  produce,  either  in  its  rude  state,  or  in  what 
may  be  called  the  very  first  stage  of  manufacture.  The  more 
advanced  or  more  refined  manufactures  even  of  the  colony 
produce,  the  merchants  and  manufacturers  of  Great  Britain 
choose  to  reserve  to  themselves,  and  have  prevailed  upon  the 
legislature  to  prevent  their  establishment  in  the  colonics, 
sometimes  by  high  duties,  and  sometimes  by  absolute 
prohibitions. 

While,  for  example,  Muscovado  sugars  from  the  British 
plantations  pay  upon  importation  only  6*.  4c?.  the  hundred 
weight;  white  sugars  pay  j£l,  is.  If?.;  and  refined,  either 
double  or  single,  in  loaves,  £A,  2«.  5c?.  ^q.  When  those  high 
duties  were  imposed  Great  Britain  was  the  sole,  and  she 
still  continues  to  be  the  principal  market  to  which  the 
sugars  of  the  British  colonies  could  be  exported.  They 
amounted,  therefore,  to  a  prohibition,  at  first  of  claying  or 
refining  sugar  for  any  foreign  market,  and  at  present  of  clay- 
ing or  refining  it  for  the  market,  which  takes  oft",  perhai)s, 
more  than  nine  tenths  of  the  whole  produce.  The  manufac- 
ture of  claying  or  refining  sugar  accordinglj',  though  it  has 
flourished  in  all  the  sugar  colonies  of  France,  has  been  little 
cultivated  in  any  of  those  of  England,  except  for  the  market 
of  the  colonies  themselves.  While  Grenada  was  in  tlie 
hands  of  the  French  there  was  a  refinery  of  sugar,  by  clay- 
ing at  least,  upon  almost  every  plantation.  Since  it  foil 
into  those  of  the  English,  almost  all  works  of  this  kind  have 
been  given  up,  and  there  are  at  present,  October,  1773,  I  am 
assured,  not  above  two  or  three  remaining  in  tho  island.  At 
present,  however,  by  an  indulgence  of  the  custom-hoiisc, 
clayed  or  refined  sugar,  if  reduced  from  loaves  into  powder, 
is  commonly  imported  as  Muscovado. 

While  Great  Britain  encourages  in  America  the  manufac- 
tures of  pig  and  bar  iron,  by  exempting  them  from  duties 
to  which  the  like  commodities  are  subjected  wh"n  import(?(i 
from  any  other  country,  she  imposes  an  absolutr-  prohibition 
upon  the  erection  of  steel  furnaces  and  slit-mi  I  Is  in  any  of 


COLONIAL  POLICY  OF  EUROPE. 


21 


her  American  plantations.  She  will  not  suffer  her  colonists 
to  work  in  those  more  refined  manufactures,  even  for  their 
own  consumption ;  but  insists  upon  their  purchasing  of  her 
merchants  and  manufacturers  all  goods  of  this  kind  which 
they  have  occasion  for. 

She  prohibits  the  exportation  from  one  province  to  another 
hy  water,  and  even  the  carriage  by  land  upon  horseback  or 
in  a  cart,  of  hats,  of  wools  and  woollen  goods,  of  the  produce 
of  America,  —  a  regulation  which  effectually  prevents  the 
establishment  of  any  manufacture  of  such  commodities  for 
distant  sale,  and  confines  the  industry  of  her  colonists  in 
tliis  way  to  such  coarse  and  household  manufactures  as  a 
private  family  commonly  makes  for  its  own  use,  or  for  that 
of  some  of  its  neighbors  in  the  same  province. 

To  prohibit  a  great  people,  however,  from  making  all  that 
they  can  of  every  part  of  their  own  produce,  or  from  employ- 
inf^  their  stock  and  industry  in  the  way  that  they  judge  most 
advantageous  to  themselves,  is  a  manifest  violation  of  the 
most  sacred  rights  of  mankind.    Unjust,  however,  as  such 
prohibitions  may  be,  they  have  not  hitherto  been  very  hurtful 
I  to  the  colonies.     Land  is  still  so  cheap,  and,  consequently, 
I  labor  so  dear  among  them,  that  they  can  import  from  the 
mother  country  almost  all  the  more  refined  or  more  advanced 
manufactures  cheaper  than  they  could  make  them  for  them- 
selves.    Though  they  had  not,   therefore,   been  prohibited 
[from  establishing  such  manufactures,  yet  in  their  present 
[state  of  improvement  a  regard  to  their  own  interest  would, 
|prol)ably,  have  prevented  them  from   doing  so.     In   their 
jpresent  state  of  improvement  those  prohibitions,    perhaps, 
Iwitliout  cramping  their  industry,  or  restraining  it  from  any 
employment  to  which  it  would  have  gone  of  its  own  accord, 
ire  only  impertinent  badges  of  slavery  imposed  upon  them, 
rithout  any  sufficient  reason,  by  the  groundless  jealousy  of 
^he  merchants  and  manufacturers  of  the  mother  country.     In 
more  advanced  state  they  might  be  really  oppressive  and 
Insupportable. 

Great  Britain  too,  as  she  confines  to  her  own  market  some 
[)f  the  most  important  productions  of  the  colonies,   so  in 


111 

'11 


22 


ECONOMIC  HISTORY. 


compensation  she  gives  to  some  of  them  an  advantage  in  that 
market;  sometimes  by  imposing  higher  duties  upon  the  like 
productions  when  imported  from  other  countries,  and  some- 
times by  giving  bounties  upon  their  importation  from  the 
colonies.  In  the  first  way  she  gives  an  advantage  in  the 
home  market  to  the  sugar,  tobacco,  and  iron  of  her  own 
colonies,  and  in  the  second  to  their  raw  silk,  to  their  hemp 
and  flax,  to  their  indigo,  to  their  naval  stores,  and  to  their 
building-timber.  This  second  way  of  encouraging  the  colonv 
produce,  by  bounties  upon  importation,  is,  so  far  as  I  have 
been  able  to  learn,  peculiar  to  Great  Britain.  The  first  is 
not.  Portugal  docs  not  content  herself  with  imposing  higlier 
duties  upon  the  importation  of  tobacco  from  any  other  coun- 
try, but  prohibits  it  under  the  severest  penalties. 

With  regard  to  the  importation  of  goods  from  Europe, 
England  has  likewise  dealt  more  liberally  with  her  colonies 
than  any  other  nation. 

Great  Britain  allows  a  part,  almost  always  the  half,  gener- 
ally a  larger  portion,  and  sometimes  the  whole  of  the  duty 
which  is  paid  upon  the  importation  of  foreign  goods,  to  be 
drawn  back  upon  their  exportation  to  any  foreign  country. 
No  independent  foreign  country,  it  was  easy  to  foresee,  would 
receive  them  if  they  came  to  it  loaded  with  the  heavy  duties 
to  which  almost  all  foreign  goods  are  subjected  on  their  im- 
portation into  Great  Britain.  Unless,  therefore,  some  part 
of  those  duties  was  drawn  back  upon  exportation,  there  was 
an  end  of  the  carrying  trade,  —  a  trade  so  much  favored  by 
the  mercantile  system. 

Our  colonics,  however,  are  by  no  means  independent  for- 
eign countries;  and  Great  Britain,  having  assumed  to  her- 
self the   exclusive  right  of  supplying  them  with  all  good:* 
from  Europe,  might  have  forced  them  (in  the  same  manner  j 
as  other  countries  have  done  their  colonies)  to  receive  sucli  j 
goods  loaded  with  all  the  same  duties  which  they  paid  in  tlio  | 
mother  country.     But,  on  the  contrary,  till  1763,  the  same  j 
drawbacks  were  paid  upon  the  exportation  of  the  greater  part 
of  foreign  goods  to  our  colonies  as  to  any  independent  forj 
eign  country.     In  1763,   indeed,  by  the  4th  of  George  111.) 


COLONIAL  POLICY  OF  EUROPE. 


28 


c.  15  this  indulgence  was  a  good  deal  abated,  and  it  was 
enacted,  "That  no  part  of  the  duty  called  the  old  subsidy 
should  be  drawn  back  for  any  goods  of  the  growth,  produc- 
tion, or  manufacture  of  Europe  or  the  East  Indies,  which 
should  be  exported  from  this  kingdom  to  any  British  colony 
or  plantation  in  America;  wines,  white  calicoes,  and  muslins 
excepted."  Before  this  law  many  different  sorts  of  foreign 
Lioods  might  have  been  bought  cheaper  in  the  plantations 
than  in  the  mother  country ;  and  some  may  still. 

Of  the  greater  part  of  the  regulations  concerning  the 
colony  trade,  the  merchants  who  carry  it  on,  it  must  be  ob- 
served, have  been  the  principal  advisers.  We  must  not 
wonder,  therefore,  if,  in  the  greater  part  of  them,  their  in- 
terest has  been  more  considered  than  either  that  of  the 
colonies  or  that  of  the  mother  country.  In  their  exclusive 
privilege  of  supplying  the  colonies  with  all  the  goods  which 
they  wanted  from  Europe,  and  of  purchasing  all  such  parts 
of  their  surplus  produce  as  could  not  interfere  with  any  of 
the  trades  which  they  themselves  carried  on  at  home,  the  in- 
terest of  the  colonies  was  sacrificed  to  the  interest  of  those 
merchants.  In  allowing  the  same  drawbacks  upon  the  re- 
exportation of  the  greater  part  of  European  and  East  India 
goods  to  the  colonies,  as  upon  their  re-exportation  to  ?.ny 
independent  country,  the  interest  of  the  mother  country  was 
sacrificed  to  it,  even  according  to  the  mercantile  ideas  of 
that  interest.  It  was  for  the  interest  of  the  merchants  to  pay 
as  little  as  possible  for  the  foreign  goods  which  they  sent  to 
the  colonies,  and  consequently,  to  got  back  as  much  as  pos- 
sible of  the  duties  which  they  advanced  upon  their  importa- 
tion into  Great  Britain.  They  might  therel)y  be  enabled  to 
sell  in  the  colonies,  either  the  same  quantity  of  goods  with 
a  greater  profit,  or  a  greater  quantity  with  the  same  profit, 
and,  consequently,  to  gain  something  cither  in  the  one  way 
or  the  other.  It  was  likewise  for  the  interest  of  the  colonies 
to  n:et  all  such  goods  as  cheap  and  in  as  great  abundance  as 
possible.  But  this  might  not  always  be  for  the  interest  of 
the  mother  country.  She  might  frequently  suffer  both  in 
her  revenue,  by  giving  back  a  great  part  of  the  duties  which 


ECONOMIC  HISTORY. 


had  been  paid  upon  the  importation  of  such  goods ;  and  in 
her  manufactures,  by  being  undersold  in  the  colony  market, 
in  consequence  of  the  easy  terms  upon  which  foreign  manu- 
factures could  be  carried  thither  by  means  of  those  draw- 
backs. The  progress  of  the  linen  manufacture  of  Great 
Britain,  it  is  commonly  said,  has  been  a  good  deal  retarded 
by  the  drawbacks  upon  the  re-exportation  of  German  linen  to 
the  American  colonies. 

But  though  the  policy  of  Great  Britain  with  regard  to  the 
trade  of  her  colonies  has  been  dictated  by  the  same  mercan- 
tile spirit  as  that  of  other  nations,  it  bias,  however,  upon  the 
whole,  been  less  illiberal  and  oppressive  than  that  of  any  of 
them. 

In  everything,  except  their  foreign  trade,  the  liberty  of 
the  English  colonists  to  manage  their  own  affairs  their  own 
way  is  complete.  It  is  in  every  respect  equal  to  that  of 
their  fellow-citizens  at  home,  and  is  secured  in  the  same 
manner,  by  an  assembly  of  the  representatives  of  the  people, 
who  claim  the  sole  right  of  imposing  taxes  for  the  support  of 
the  colony  government.  The  authority  of  this  assembly 
overawes  the  executive  power,  and  neither  the  meanest  nor 
the  most  obnoxious  colonist,  as  lonp^  as  he  obeys  the  law, 
has  anything  to  fear  from  the  resentment,  either  of  the  gov- 
ernor, or  of  any  other  civil  or  military  officer  in  the  province. 
The  colony  assemblies,  though,  like  the  house  of  commons  in 
England,  they  are  not  always  a  very  equal  representation  of 
the  people,  yet  they  approach  more  nearly  to  that  character; 
and  as  the  executive  power  either  has  not  the  means  to  cor- 
rupt them,  or,  on  account  of  the  support  which  it  receives 
from  the  mother  country,  is  not  under  the  necessity  of  doing 
so,  they  are  perhaps  in  general  more  influenced  by  the  incli- 
nations of  their  constituents.  The  councils,  which,  in  the 
colony  legislatures,  correspond  to  the  house  of  lords  in  Great 
Britain,  arc  not  composed  of  an  hereditary  nobility.  In 
some  of  the  colonies,  as  in  three  of  the  governments  of  New 
England,  those  councils  are  not  appointed  by  the  king,  but 
chosen  by  the  representatives  of  the  people.  In  none  of  the 
English  colonies  is  there  any  hereditary  nobility.     In  all  of 


COLONIAL  POLICY  OF  EUROPE. 


26 


them,  indeed,  as  in  all  other  free  countries  the  descendant 
of  an  old  colony  family  is  more  respected  than  an  upstart  of 
equal  merit  and  fortune ;  but  he  is  only  more  respected,  and 
he  has  no  privileges  by  which  he  can  be  troublesome  to  his 
neighbors.  Before  the  commencement  of  the  present  dis- 
turbances, the  colony  assemblies  had  not  only  the  legislative, 
but  a  part  of  the  executive  power.  In  Connecticut  and 
Rhode  Island  they  elected  the  governor.  In  the  other  colo- 
nies they  appointed  the  revenue  officers  who  collected  the 
taxes  imposed  by  those  respective  assemblies,  to  whom  those 
officers  were  immediately  responsible.  There  is  more  equal- 
ity, therefore,  among  the  English  colonists  than  among  the 
inhabitants  of  the  mother  country.  Their  hianners  are  more 
republican,  and  their  governments,  those  of  three  of  the 
provinces  of  New  England  in  particular,  have  hitherto  been 
more  republican  too. 

The  absolute  governments  of  Spain,  Portugal,  and  France, 
on  the  contrary,  take  place  in  their  colonies;  and  the  dis- 
cretionary powers  which  such  governments  commonly  dele- 
gate to  all  their  inferior  officers  are,  on  account  of  the  great 
distance,  naturally  exercised  there  with  more  than  ordinary 
violence.  Under  all  absolute  governments  there  is  more 
liberty  in  the  capital  than  in  any  other  part  of  the  country. 
The  sovereign  himself  can  never  have  either  interest  or  in- 
clination to  pervert  the  order  of  justice,  or  to  oppress  the 
great  body  of  the  people.  In  the  capital  his  presence  over- 
I  awes  more  or  less  all  his  inferior  officers,  who  in  the  remoter 
j  provinces,  from  whence  the  complaints  of  the  people  are  less 
likely  to  reach  him,  can  exercise  their  tyranny  with  much 
more  safety.  But  the  European  colonies  in  America  are 
more  remote  than  the  most  distant  provinces  of  the  greatest 
empires  which  had  ever  been  known  before.  The  govern- 
ment of  the  English  colonies  is  perhaps  the  only  one  which, 
since  the  world  began,  could  give  perfect  security  to  the  in- 
habitants of  so  very  distant  a  province.  The  administration 
of  the  French  colonies,  however,  has  always  been  conducted 
with  more  gentleness  and  moderation  than  that  of  the  Span- 
ish and  Portuguese.     This  superiority  of  conduct  is  suitable 


■•m 


'\m 


26 


ECONOMIC  HISTORY. 


both  to  tho  character  of  the  French  nation,  and  to  what 
forms  the  character  of  every  nation,  the  nature  of  their  gov- 
ernment, which,  though  arbitrary  and  violent  in  comparison 
with  that  of  Great  Britain,  is  legal  and  free  in  comparison 
with  those  of  Spain  and  Portugal. 

It  if  in  the  progress  of  tho  North  American  colonies,  how- 
ever, that  the  superiority  of  the  English  policy  chiefly 
appears.  The  progress  of  the  sugar  colonics  of  France  has 
been  at  least  equal,  perhaps  superior,  to  that  of  the  greater 
part  of  those  of  England ;  and  yet  the  sugar  colonies  of  Eng- 
land enjoy  a  free  government  nearly  of  the  same  kind  with 
that  which  takes  place  ia  her  colonies  of  North  America. 
But  the  sugar  colonies  of  France  are  not  discouraged,  like 
those  of  England,  from  refining  their  own  sugar;  and,  what 
is  of  still  greater  importance,  the  genius  of  their  government 
naturally  introduces  a  better  management  of  their  negro 
slaves. 

In  all  European  colonies  the  culture  of  the  sugar-cane  is 
carried  on  by  negro  slaves.  The  constitution  of  those  who 
have  been  born  in  the  temperate  climate  of  Europe  could  not, 
it  is  supposed,  support  the  labor  of  digging  the  ground  under 
the  burning  sun  of  the  West  Indies ;  and  the  culture  of  the 
sugar-cane,  as  it  is  managed  at  present,  is  all  hand  labor, 
though,  in  the  opinion  of  many,  the  drill  plough  might  be 
introduced  into  it  with  great  advantage.  But,  as  the  profit 
and  success  of  the  cultivation  which  is  carried  on  by  means 
of  cattle  depend  very  much  upon  the  good  management  of 
those  cattle,  so  the  profit  and  success  of  that  which  is  car- 
ried on  by  slaves  must  depend  equally  upon  the  good  man- 
agement of  those  slaves;  and  in  the  good  management  of 
their  slaves  the  French  planters,  I  think  it  is  generally 
allowed,  are  superior  to  the  English.  The  law,  so  far  as  it 
gives  some  weak  protection  to  the  slave  against  the  violence 
of  his  master,  is  likely  to  be  better  executed  in  a  colony 
where  the  government  is  in  a  great  measure  arbitrary  than 
in  one  where  it  is  altogether  free.  In  every  country  where  | 
the  unfortunate  law  of  slavery  is  established,  the  magistrate, 
when  he  protects  the  slave,  intermeddles  in  some  measure  in 


COLONIAL  POLICY  OF  EUROPE. 


27 


i 


the  management  of  the  private  property  of  the  master ;  and 
in  a  free  country,  where  the  master  is  perhaps  either  a  mem* 
ber  of  the  colony  assembly  or  an  elector  of  such  a  member, 
he  dare  not  do  this  but  with  the  greatest  caution  and  circum- 
sijcction.  The  respect  which  he  is  obliged  to  pay  to  the 
master  renders  it  more  difficult  for  him  to  protect  the  slave. 
JJiit  in  a  country  where  the  government  is  in  a  great  measure 
arbitrary,  where  it  is  usual  for  the  magistrate  to  intermeddle 
even  in  the  management  of  the  private  property  of  individ- 
uals, and  to  send  them,  perhaps,  a  lettre  de  cachet  if  they  do 
not  manage  it  according  to  his  liking,  it  is  much  easier  for 
him  to  give  some  protection  to  the  slave ;  and  common  hu- 
manity naturally  disposes  him  to  do  so.  The  protection  of 
the  magistrate  renders  the  slave  less  contemptible  in  the 
eyes  of  his  master,  who  is  thereby  induced  to  consider  him 
with  more  regard,  and  to  treat  him  with  more  gentleness. 
Gentle  usage  renders  the  slave  not  only  more  faithful,  but 
more  intelligent,  and  therefore,  upon  a  double  account,  more 
useful.  He  approaches  more  to  the  condition  of  a  free  ser- 
vant, and  may  possess  some  degree  of  integrity  and  attach- 
ment to  his  master's  interest, —  virtues  which  frequently 
belong  to  free  servants,  but  which  never  can  belong  to  a 
slave  who  is  treated  as  slaves  commonly  are  in  countries 
where  the  master  is  perfectly  free  and  sccui'c. 

That  the  condition  of  a  slave  is  better  under  an  arbitrary 
than  under  a  free  government  is,  I  believe,  supported  by  the 
history  of  all  ages  and  nations.  In  the  Roman  history,  the 
first  time  we  read  of  the  magistrate  interposing  to  protect 
the  slave  from  the  violence  of  his  master  is  under  the  em- 
perors. When  Vedius  Pollio,  in  the  presence  of  Augustus, 
ordered  one  of  his  slaves,  who  had  committed  a  slight  fault, 
to  be  cut  into  pieces,  and  thrown  into  his  fish-pond  in  order 
to  feed  his  fishes,  the  emperor  commanded  him,  with  indig- 
nation, to  emancipate  immediately,  not  only  that  slave,  but 
all  the  others  that  belonged  to  him.  Under  the  republic  no 
magistrate  could  have  had  authority  enough  to  protect  the 
slave,  much  less  to  punish  the  master. 

The  stock,  it  is  to  be  observed,  which  has  improved  the 


28 


ECONOMIC  HISTORY. 


sugar  colonics  of  France,  particularly  the  great  colony  of  St. 
Domingu,  has  been  raised  almost  entirely  from  the  gradual 
improvement  and  cultivation  of  those  colonies.  It  has  been 
almost  altogether  the  produce  of  the  soil  and  of  the  industry 
of  the  colonists,  or,  what  comes  to  the  same  thing,  the  price 
of  that  produce,  gradually  accumulated  by  good  management, 
and  employed  in  raising  a  still  greater  produce.  But  the 
stock  which  has  improved  and  cultivated  the  sugar  colonics 
of  England  has,  a  great  part  of  it,  been  sent  out  from  Eng- 
land, and  has  by  no  means  been  altogether  the  produce  of 
the  soil  and  industry  of  the  colonists.  The  i>ro8perity  of  the 
English  sugar  colonies  has  been,  in  a  great  measure,  owing 
to  the  great  riches  of  England,  of  which  a  part  has  over- 
flowed, if  one  may  say  so,  upon  those  colonies.  But  the 
prosperity  of  the  sugar  colonies  of  Prance  has  been  entirely 
owing  to  the  good  conduct  of  the  colonists,  which  must  there- 
fore have  had  some  superiority  over  that  of  the  English ;  and 
this  superiority  has  been  remarked  in  nothing  so  much  us  in 
the  good  management  of  their  slaves. 

Such  have  been  the  general  outlines  of  the  policy  of  the 
different  European  nations  with  regard  to  their  colonies. 

The  policy  of  Europe,  therefore,  has  very  little  to  boast  of, 
either  in  the  original  establishment,  or,  so  far  as  concerns 
their  internal  government,  in  the  subsequent  prosperity  of 
the  colonies  of  America. 

Folly  and  injustice  seem  to  have  been  the  principles  which 
presided  over  and  directed  the  first  project  of  establishing 
those  colonies;  the  folly  of  hunting  after  gold  and  silver 
mines,  and  the  injustice  of  coveting  the  possession  of  a  coun- 
try whose  harmless  natives,  far  from  having  ever  injured  the 
people  of  Europe,  had  received  the  first  adventurers  with 
every  mark  of  kindness  and  hospitality. 

The  adventurers,  indeed,  who  formed  some  of  the  later 
establishments,  joined  to  the  chimerical  project  of  finding 
gold  and  silver  mines  other  motives  more  reasonable  and 
more  laudable ;  but  even  these  motives  do  very  little  honor 
to  the  policy  of  Europe. 

The  English  Puritans,  restrained  at  home,  fled  for  free- 


tt 


COLONIAL  POLICY  OF  EUROPE.  29 

dom  to  America,  and  established  there  the  four  governments 
of  New  Kn<;hind.  The  English  Catholics,  treated  with  much 
prrat<>r  injustice,  established  that  of  Maryland;  the  Quakers, 
timt  of  P«'nnsylvania.  The  Portuguese  Jews,  persecuted  by 
tlio  IiKiiiisition,  stripped  of  their  fortunes,  and  banished  to 
Ibazil,  introduced,  by  their  example,  some  sort  of  order 
and  intliiatry  among  the  transported  felons  and  strumpets, 
l)y  whom  that  colony  was  originally  peopled,  and  taught 
them  the  culture  of  the  sugar-cane.  Upon  all  these  differ- 
ent occasions,  it  was,  not  the  wisdom  and  policy,  but  the 
disonlor  and  injustice,  of  the  European  governments,  which 
peopled  and  cultivated  America. 

In  effectuating  some  of  the  most  important  of  these  estab- 
lislinionts,  the  different  governments  of  Europe  had  as  little 
merit  as  in  projecting  them.  The  conquest  of  Mexico  was 
the  project,  not  of  the  council  of  Spain,  but  of  a  governor  of 
Cuba ;  and  it  was  effectuated  by  the  spirit  of  the  bold  adven- 
turer to  whom  it  was  entrusted,  in  spite  of  everything  which 
that  governor,  who  soon  repented  of  having  trusted  such  a 
person,  could  do  to  thwart  it.  The  conquerors  of  Chili  and 
Peru,  and  of  almost  all  the  other  Spanish  settlements  upon 
the  continent  of  America,  carried  out  with  them  no  other 
public  encouragement,  but  a  general  permission  to  make 
settlements  and  conquests  in  the  name  of  the  king  of  Spain. 
Those  adventures  were  all  at  the  private  risk  and  expense 
of  the  adventurers.  The  government  of  Spain  contributed 
scarce  anything  to  any  of  them.  That  of  England  contrib- 
uted as  little  towards  effectuating  the  establishment  of  some 
of  its  most  important  colonies  in  North  America. 

When  those  establishments  were  effectuated,  and  had  be- 
j  come  so  considerable  as  to  attract  the  attention  of  the  mother 
country,  the  first  regulations  which  she  made  with  regard  to 
tliem  had  always  in  view  to  secure  to  herself  the  monopoly  of 
their  commerce, —  to  confine  their  market,  and  to  enlarge  her 
own  at  their  expense,  and,  consequently,  rather  to  damp  and 
discourage,  than  to  quicken  and  forward,  the  course  of  their 
prosperity.  In  the  different  ways  in  which  this  monopoly 
has  been  exercised,  consists  one  of  the  most  essential  differ- 


fll 

I 


30 


ECONOMIC  HISTORY. 


enccs  in  the  policy  of  the  different  European  nations  with 
regard  to  their  colonies.  The  best  of  them  all,  that  of  Eng- 
land, is  only  somewhat  less  illiberal  and  oppressive  than 
that  of  any  of  the  rest. 

In  what  way,  therefore,  has  the  policy  of  Europe  contrib- 
uted either  to  the  first  establishment  or  to  the  present 
grandeur  of  the  colonies  of  America  ?  In  one  way,  and  in 
one  way  only,  it  has  contributed  a  good  deal.  Magna  virum 
Mater !  It  bred  and  formed  the  men  who  were  capable  of 
achieving  such  great  actions,  and  of  laying  the  foundation  of 
so  great  an  empire;  and  there  is  no  other  quarter  of  the 
world  of  which  the  policy  is  capable  of  forming,  or  has  ever 
actually  and  in  fact  formed,  such  men.  The  colonies  owe  to 
the  policy  of  Europe  the  education  and  great  views  of  their 
active  and  enterprising  founders ;  and  some  of  the  greatest 
and  most  important  of  them,  so  far  as  concerns  their  internal 
government,  owe  to  it  scarce  anything  else. 


THE  GREAT  INVENTIONS. 


81 


n. 


THE  GREAT  INVENTIONS. 
Fkom  Walpole'8  History  of  England,^  Vol.  I.   pp.  50-76. 

THE  manufacturing  industries  of  the  country  had  never 
previously  experienced  so  marvellous  a  development. 
The  hum  of  the  workshop  was  heard  in  places  which  had  pre- 
viously only  been  disturbed  by  the  whirr  of  the  grouse ;  and 
new  forces,  undreamed  of  a  century  before,  were  employed  to 
assist  the  progress  of  production.  The  trade  of  the  United 
Kingdom  acquired  an  importance  which  it  had  never  pre- 
viously enjoyed,  and  the  manufacturing  classes  obtained  an 
influence  which  they  had  never  before  known.  The  land- 
owners were  slowly  losing  the  monopoly  of  power  which  they 
had  enjoyed  for  centuries.  Traders  and  manufacturers  were 
daily  obtaining  fresh  wealth  and  influence.  A  new  England 
was  supplanting  the  old  country;  and  agriculture,  the  sole 
business  of  our  forefathers,  was  gradually  becoming  of  less 
importance  than  trade.  In  1793,  the  first  year  of  the  war, 
the  official  value  of  all  the  imports  into  Britain  was  less  than 
£20,000,000.  In  1815,  the  year  of  Waterloo,  it  exceeded 
£31,000,000.  In  1792  the  official  value  of  British  and  Irish 
exports  was  only  £18,000,000 ;  it  rose  in  1815  to  £41,000,000. 
The  official  values,  however,  give  only  a  very  imperfect  idea  of 
I  the  extent  of  our  export  trade.  They  are  based  on  prices  fixed 
s )  far  back  as  1696,  and  afford,  therefore,  an  inaccurate  test 
j  of  the  extent  of  our  trade.  No  attempt  was  made  to  ascertain 
the  declared  or  real  value  of  the  exports  till  the  year  1798, 
I  when  it  slightlv  exceeded  £33,000,000.  The  declared  value 
[of  the  exports  of  British  and  Irish  produce  in  1815  exceeded 
£49,000,000.  The  rise  in  the  value  of  the  exports  and  im- 
[  ports  was  attributable  to  many  causes.     The  predominance 

X  London :  Longmans,  Green,  &  Co.,  1878. 


\  '\- 


82 


ECONOMIC  HISTORY. 


of  the  British  at  sea  had  driven  every  enemy  from  the  ocean, 
and  had  enabled  British  merchants  to  ply  their  trade  in 
comparative   safety.     The  .rous  possessions  which  the 

British  had  acquired  in  evi  .quarter  of  the  globe  had  pro- 
vided them  with  customers  m  all  parts  of  the  world;  and 
the  most  civilized,  as  well  as  the  most  savage,  of  nations 
were  purchasing  the  produce  of  the  looms  of  Manchester  and 
of  the  factories  of  Birmingham.  Even  the  taxation  which  the 
war  had  necessitated  had  stimulated  the  manufacturers  to 
fresh  exertions.  The  merchants  were  continually  discover- 
ing fresh  outlets  for  British  trade ;  the  manufacturers  were 
constantly  encouraged  to  increase  their  produce.^ 

Wool  was  the  most  ancient  and  most  important  of  English 
manufactures.  Custom  seemed  to  point  to  the  permanent 
superiority  of  the  woollen  trade.  The  Chancellor  of  Eng- 
land sat  on  a  sack  of  wool;  and  when  men  spoke  of  the 
staple  trade,  they  always  referred  to  the  trade  in  wool.  For 
centuries  British  sovereigns  and  British  statesmen  had,  after 
their  own  fashion,  and  according  to  their  own  ideas,  actively 
promoted  this  particular  industry.  Edward  III.  had  induced 
Flemish  weavers  to  settle  in  this  country.  The  Restoration 
Parliament  prohibited  the  exportation  of  British  wool,  and 
had  ordered  that  the  very  dead  should  be  interred  in  woollen 
shrouds.  The  manufacturers  spread  over  the  entire  king- 
dom. Wherever  there  was  a  running  stream  to  turn  their 
mill,  there  was  at  any  rate  the  possibility  of  a  woollen  fac- 
tory. Norwich,  with  its  contiguous  village  of  Worsted,  was 
the  chief  seat  of  the  trade.  But  York  and  Bradford,  Worces- 
tershire and  Gloucestershire,  Manchester  and  Kendal,  were 
largely  dependent  on  it. 

The  steps  which  Parliament  took  to  promote  this  particu- 
lar industry  were  not  always  very  wise ;  in  one  point  they 
were  not  very  just.  Ireland,  in  many  respects,  could  have 
competed  on  advantageous  terms  with  the  woollen  manufac- 
turers of  England.     English  jealousy  prohibited  in  conse- 

1  McCulloch's  "  Commercial  Dictionary,"  imports  and  exports ;  of.,  however,  | 
Porter's  "  F'rogress  of  the  Nation,"  p.  867,  where  tlie  figures  are  slightly  differ- 
ent   Nothing  is  more  difficult  than  to  ascertain  the  correct  figures. 


-1 


THE  GREAT  INVENTIONS. 


88 


qucnce  the  importation  of  Irish  manufactured  woollen  goods. 
The  result  hardly  answered  the  sanguine  anticipations  of  the 
selfish  senators  who  had  secured  it.  The  Irish,  instead  of 
sending  their  fleeces  to  be  worked  up  in  Great  Britain, 
smuggled  them,  in  return  for  contraband  spirits,  to  France. 
England  failed  to  obtain  any  large  addition  to  her  raw  mate- 
rial; and  Ireland  was  driven  into  closer  communication  with 
the  hereditary  foe  of  England.  The  loss  of  the  Irish  fleeces 
was  the  more  serious  from  another  cause.  The  home  supply 
of  wool  had  originally  been  abundant  and  good ;  but  its  pro- 
duction, at  the  commencement  of  the  century,  was  not  in- 
creasing as  rapidly  as  the  demand  for  it;  the  quality  of 
home  grown  wool  was  rapidly  deteriorating.  The  same 
slieep  do  not  produce  both  wool  and  mutton  in  the  greatest 
|)crfection.  Every  improvement  in  their  meat  is  effected  at 
the  cost  of  their  fleece.  English  mutton  was  better  than  it 
had  ever  been;  but  English  manufacturers  were  compelled  to 
mix  foreign  with  native  wool.  Had  trade  been  free  this 
result  would  have  been  of  little  moment.  The  English  could 
have  easily  obtained  an  ample  supply  of  raw  material  from 
the  hills  of  Spain  and  other  countries.  But,  at  the  very 
time  at  which  foreign  wool  became  indispensable,  the  necessi- 
ties of  the  country,  or  the  ignorance  of  her  financiers,  led  to 
the  imposition  of  a  heavy  import  duty  on  wool.  Addington, 
in  1802,  levied  a  duty  upon  it  of  5s.  3t?.  the  cwt.  ;  Vansittart, 
in  1813,  raised  the  tax  to  6».  8t?.  The  folly  of  the  protec- 
tionists had  done  much  to  ruin  the  wool  trade.  But  the  evil 
already  done  was  small  in  comparison  with  that  in  store. 

Notwithstanding,  however,  the  restrictions  on  the  wool 
trade,  the  woollen  industry  was  of  great  importance.  In 
1800,  Law,  as  counsel  to  the  manufacturers,  declared,  in  an 
address  to  the  house  of  lords,  that  600,000  packs  of  wool, 
[worth  £6,600,000  were  produced  annually  in  England  and 
j  Wales,  and  that  1,500,000  persons  were  emploj-ed  in  the 
manufacture.  But  these  figures,  as  McCulloch  has  shown, 
are  undoubtedly  great  exaggerations.*    Rather  more  than 


'  McCulloch,  ad  verb.  Wool ;  Porter's  "  Progress  of  the  Nation,"  pp.  170- 


175, 


84 


ECONOMIC  HISTORY. 


400,000  packs  of  wool  were  available  for  manufacturing  pur- 
poses at  the  commencement  of  the  century ;  more  than  nine 
tenths  of  these  were  produced  at  home;  and  some  350,000 
or  400,000  persons  were  probably  employed  in  the  trade. 
The  great  woollen  industry  still  deserved  the  name  of  our 
staple  trade ;  but  it  did  not  merit  the  exaggerated  descrip- 
tions which  persons  who  should  have  known  better  applied 
to  it. 

If  the  staple  trade  of  the  country  had  originally  been  in 
woollen  goods  at  the  commencement  of  the  present  century, 
cotton  was  rapidly  gaining  upon  wool.  Cotton  had  been 
used  in  the  extreme  East  and  in  the  extreme  West  from  the 
earliest  periods  of  which  we  have  any  records.  The  Span- 
iards, on  their  discovery  of  America,  found  the  Mexicans 
clothed  in  cotton.  "  There  are  trees, "  Herodotus  had  writ- 
ten, nearly  two  thousand  years  before,  "which  grow  wild 
there  [in  India],  the  fruit  whereof  is  a  wool  exceeding  in 
beauty  and  goodness  that  of  sheep.  The  natives  make  their 
clothes  of  this  tree  wool. "  *  But  though  the  use  of  cotton 
had  been  known  from  the  earliest  ages,  both  in  India  and 
America,  no  cotton  goods  were  imported  into  Europe;  and 
in  the  ancient  world  both  rich  and  poor  were  clothed  in  silk, 
linen,  and  wool.  The  industrious  Moors  introduced  cotton 
into  Spain.  Many  centuries  afterwards  cotton  was  imported 
into  Italy,  Saxony,  and  the  Low  Countries.  Isolated  from 
the  rest  of  Europe,  with  little  wealth,  little  industry,  and  no 
roads;  rent  by  civil  commotions,  —  the  English  were  the  last 
people  in  Europe  to  introduce  the  manufacture  of  cotton 
goods  into  their  own  homes. 

Towards  the  close  of  the  sixteenth  century,  indeed,  cotton 
goods  were  occasionally  mentioned  in  the  statute  book,  and 
the  manufacture  of  the  cottons  of  Manchester  was  regulated 
by  acts  passed  in  the  reigns  of  Henry  VIII.,  Edward  VI,, 
and  Elizabeth.  But  there  seem  to  be  good  reasons  for  con- 
cluding that  Manchester  cottons,  in  the  time  of  the  Tudors, 
were  woollen  goods,  and  did  not  consist  of  cotton  at  all. 


»  Rawlinson's  "  Herodotus,"  Tol.  li.  p.  411. 
Baumwolie  —  tree  wool. 


T!ie  German  name  for  cotton  is 


.III 


THE  GREAT  INVENTIONS. 


85 


More  than  a  century  elapsed  before  any  considerable  trade  in 
cotton  attracted  the  attention  of  the  legislature.  The  woollen 
manufacturers  complained  that  people  were  dressing  their 
cliildrcn  in  printed  cottons;  and  Parliament  was  actually 
persuaded  to  prohibit  the  introduction  of  Indian  printed 
calicoes.  Even  an  act  of  Parliament,  however,  was  unable 
to  extinguish  the  growing  taste  for  Indian  cottons.  The 
ladies,  according  to  the  complaint  of  an  old  writer,  expected 
"  to  do  what  they  please,  to  say  what  they  please,  and  wear 
what  they  please."  The  taste  for  cotton  led  to  the  introduc- 
tion of  calico-printing  in  London;  Parliament,  in  order  to 
encourage  the  new  trade,  was  induced  to  sanction  the  impor- 
tation of  plain  cotton  cloths  from  India  under  a  duty.  The 
demand  which  was  thus  created  for  calicoes  probably  pro- 
moted their  manufacture  at  home;  and  Manchester,  Bolton, 
Frome,  and  other  places,  gradually  acquired  fresh  vitality 
from  the  creation  of  a  new  industry. 

Many  years,  however,  passed  before  the  trade  attained 
anything  but  the  slenderest  proportions.  In  the  year  1697 
only  1,976,359  pounds  of  cotton  wool  were  imported  into  the 
United  Kingdom.  In  the  year  1751  only  2,976,610  pounds 
Averc  imported.  The  official  value  of  cotton  goods  exported 
amounted  in  the  former  year  to  only  £5,915;  in  the  latter 
year  to  only  £45,986.  At  the  present  time  Britain  annually 
purchases  about  1,500,000,000  pounds  of  cotton  wool.  She 
annually  disposes  of  cotton  goods  worth  £60,000,000.  The 
lm])ort  trade  is  five  hundred  times  as  large  as  it  was  in 
1751;  the  value  of  the  exports  has  been  increased  ?,300  fold. 
The  world  has  never  seen,  in  any  similar  period,  so  prodi- 
gious a  growth  of  manufacturing  industry.  But  the  trade 
has  not  merely  grown  from  an  infant  into  a  giant;  its  con- 
ditions have  been  concurrently  revolutionized.  Up  to  the 
middle  of  the  last  century  cotton  goods  were  really  never 
made  at  all.  The  so-called  cotton  manufactures  were  a 
combination  of  wool,  or  linen,  and  cotton.  No  Englishman 
had  been  able  to  produce  a  cotton  thread  strong  enough  for 
the  warp;  and  even  the  cotton  manufacturers  themselves 
appear  to  have  despaired  of  doing  so.     They  induced  Parlia- 


86 


ECONOMIC  HISTORY. 


ment  in  1736  to  repeal  the  prohibition  which  still  encum- 
bered the  statute  book,  against  wearing  printed  calicoes; 
but  the  repeal  was  granted  on  the  curious  condition  "that 
the  warp  thereof  be  entirely  linen  yarn."  Parliament  no 
doubt  intended  by  this  condition  to  check  the  importation  of 
Indian  goods  without  interfering  with  the  home  manufac- 
turers. The  superior  skill  of  the  Indian  manufacturers 
enabled  them  to  use  cotton  for  a  warp;  while  clumsy  work- 
manship made  the  use  of  cotton  as  a  warp  unattainable  at 
lioine. 

in  tin  middle  of  the  eighteenth  century,  then,  a  piece  of 
co!',<.» »  doth,  in  the  true  sense  of  the  term,  had  never  been 
made  n  Fn;^land.  The  so-called  cotton  goods  were  all  made 
in  the  «•  ;;'s  of  the  weavers.  The  yarn  was  carded  by 
hai^;  :t  ■...,  r^,';".  by  hand;  it  was  worked  into  cloth  by  a 
hand-loom,  ihe  weaver  was  usually  the  head  of  the  family; 
his  wife  and  unmarried  daughters  spun  the  yarn  for  him. 
Spinning  was  the  ordinary  occupation  of  every  girl,  and  the 
distaff  was,  for  countless  centuries,  the  ordinary  occupation 
of  every  woman.  The  occupation  was  so  universal  that  tlie 
distaff  was  occasionally  used  as  a  synonym  for  woman. 
"Le  royaume  de  France  ne  tombe  point  en  quenouille." 

"  See  my  royal  master  murdered, 
His  crown  usurped,  a  distaff  in  the  throne." 

To  this  day  every  unmarried  girl  is  commonly  described  as 
a  "  spinster. " 

The  operation  of  weaving  was,  however,  much  more  rapid 
than  that  of  spinning.  The  weaver  consumed  more  weft 
than  his  own  family  could  supply  him  with ;  and  the  wciivois 
generally  experienced  the  greatest  ditliculty  in  obtaining 
sufficient  yarn.  About  the  middle  of  the  eighteenth  century 
the  ingenuity  of  two  persons,  a  father  and  a  s(m,  made  tliis 
difference  more  apparent.  The  shuttle  had  originally  bom 
thrown  by  the  hand  from  one  end  of  the  loom  to  the  other. 
John  Kay,  a  native  of  Bury,  by  his  invention  of  tlie  lly- 
shuttle,  saved  the  weaver  from  this  labor.  The  lathe  in 
which  the  shuttle  runs  was  lengthened  at  both  ends;   two 


THE  GREAT  INVENTIONS. 


87 


strings  were  attached  to  its  opposite  ends ;  the  strings  were 
held  by  a  peg  in  the  weaver's  hands,  and  by  plucking  the 
peg  the  weaver  was  enabled  to  give  the  necessary  impulse 
to  the  shuttle.  Robert  Kay,  John  Kay's  son,  added  the 
drop-box,  by  means  of  which  the  weaver  was  able  "to  use 
anv  one  of  the  three  shuttles,  each  containing  a  different 
colored  weft,  without  the  trouble  of  taking  them  from  and 
replacing  them  in  the  lathe. "     By  means  of  these  inventions 

at  ^H  the  productive  power  of  each  weaver  was  doubled.  Each 
weaver  was  easily  able  to  perform  the  amount  of  work  which 
had  previously  required  two  men  to  do;  and  the  spinsters 
found  themselves  more  hopelessly  distanced  than  ever  in 
tlieir  efforts  to  supply  the  weavers  with  weft. 

The  preparation  of  weft  was  entirely  accomplished  by 
manual  labor,  and  the  process  was  very  complicated.  Card- 
ing and  roving  were  both  slowly  performed  with  the  aid  of 
the  clumsy  implements  which  had  originally  been  invented 
for  the  purpose.  "Carding  is  the  process  to  which  the 
cotton  is  subjected  after  it  has  been  opened  and  cleaned, 
in  order  that  the  fibres  of  the  wool  may  be  disentangled, 
straightened,  and  laid  parallel  with  each  other,  so  as  to  ad- 
mit of  being  spun.  This  was  formerly  effected  by  instru- 
ments called  hand-cards,  which  were  brushes  made  of  short 
pieces  of  wire  instead  of  bristles,  the  wires  being  stuck  into 
a  slicet  of  leather  at  a  certain  angle,  and  the  leather  fast- 
ened on  a  flat  piece  of  wood  about  twelve  inches  long  and 
five  wide,  with  a  handle.  The  cotton  being  spread  upon  one 
of  the  cards,  it  was  repeatedly  combed  with  another  till  all 
the  fibres  were  laid  straight,  when  it  was  stripped  off  the 
i;ard  in  a  fleecy  roll  ready  for  the  rover.  In  '  roving '  the 
spinner  took  the  short  fleecy  rolls  in  which  the  cotton  was 
stripped  off  the  hand-cards,  applied  them  successively  to  the 

Ins  UH  spindle,  and  while  with  one  hand  she  turned  the  wheel  and 
lorn  mM  tints  made  the  spindle  revolve,  with  the  other  she  drew  out 
lit'i".  ^Bl  the  cardings,  which,  receiving  a  slight  twist  from  the  spin- 
dle, were  made  into  thick  threads  called  rovings,  and  wound 
in  ^■upon  the  spindle  so  as  to  form  cops."     In  spinning,  "the 

two  ^H  roving  was  spun  into  yarn ;  the  operation  was  similar,  but 


88 


ECONOMIC  HISTORY. 


the  thread  was  drawn  out  much  finer  and  received  much 
more  twist.  It  will  be  seen  that  this  instrument  only  ad- 
mitted of  one  thread  being  spun  at  a  time  by  one  pair  of 
hands,  and  the  slowness  of  the  operation  and  consequent 
expensiveness  of  the  yarn  formed  a  great  obstacle  to  the 
establishment  of  a  new  manufacture." 

The  trade  was  in  this  humble  and  primitive  state  when  a 
series  of  extraordinary  and  unparalleled  inventions  revolu- 
tionized the  conditions  on  which  cotton  had  been  hitherto 
prepared.  A  little  more  than  a  century  ago  John  Har- 
greaves,  a  poor  weaver  in  the  neighborhood  of  Blackburn, 
was  returning  home  from  a  long  walk  in  which  he  had  been 
purchasing  a  further  supply  of  yarn  for  his  loom.  As  ho 
entered  his  cottage,  his  wife  Jenny  accidentally  upset  the 
spindle  which  she  was  using.  Hargreaves  noticed  that  the 
spindles,  which  were  now  thrown  into  an  upright  position, 
continued  to  revolve,  and  that  the  thread  was  still  spinning 
in  his  wife's  hand.  The  idea  immediately  occurred  to  him 
that  it  would  be  possible  to  connect  a  considerable  number 
of  upright  spindles  with  one  wheel,  and  thus  multiply  the 
productive  power  of  each  spinster.  "  He  contrived  a  frame, 
in  one  part  of  which  he  placed  eight  rovings  in  a  row,  and 
in  another  part  a  row  of  eight  spindles.  The  rovings,  when 
extended  to  the  spindles  passed  between  two  horizontal  bars 
of  wood,  forming  a  clasp  which  opened  and  shut  somewhat 
like  a  parallel  ruler.  When  pressed  together  this  clasp  held 
the  threads  fast;  a  certain  portion  of  roving  being  extended 
from  the  spindles  to  the  wooden  clasp,  the  clasp  was  closed, 
and  was  then  drawn  along  the  horizontal  frame  to  a  consid- 
erable distance  from  the  spindles,  by  which  the  threads  were 
lengthened  out  and  reduced  to  the  proper  tenuity ;  this  was 
done  with  the  spinner's  left  hand,  and  his  right  hand  at  the 
same  time  turned  a  wheel  which  caused  the  spindles  to  re- 
volve rapidly,  and  thus  the  roving  was  spun  into  yarn.  By 
returning  the  clasp  to  its  first  situation  and  letting  down  a  | 
piercer  wire,  the  yarn  was  wound  upon  the  spindle." 

Hargreaves  succeeded  in  keeping  his  admirable  invention] 
secret  for  a  time ;  but  the  powers  of  his  machine  soon  be- 


THE  GREAT  INVENTIONS. 


89 


came  known.  His  ignorant  neighbors  hastily  concluded 
that  a  machine  which  enabled  one  spinster  to  do  the  work 
of  eight  would  throw  multitudes  of  persons  out  of  employ- 
ment. A  mob  broke  into  his  house  and  destroyed  his  ma- 
chine. Ilargreaves  himself  had  to  retire  to  Nottingham, 
where,  with  the  friendly  assistance  of  another  person,  he  was 
able  to  take  out  a  patent  for  the  spinning-jenny,  as  the 
machine,  in  compliment  to  his  industrious  wife,  was  called. 
The  invention  of  the  spinning-jenny  gave  a  new  impulse  to 
the  cotton  manufacture.  But  the  invention  of  the  spinning- 
jenny,  if  it  had  been  accompanied  by  no  other  improvements, 
would  not  have  allowed  any  purely  cotton  goods  to  be  manu- 
factured in  England.  The  yarn  spun  by  the  jenny,  like  that 
which  had  previously  been  spun  by  hand,  was  neither  fine 
enough  nor  hard  enough  to  be  employed  as  warp,  and  linen 
or  woollen  threads  had  consequently  to  be  used  for  this  pur- 
pose. In  the  very  year,  however,  in  which  Hargreaves 
moved  from  Blackburn  to  Nottingham,  Richard  Arkwright 
took  out  a  patent  for  his  still  more  celebrated  machine.  It 
la  alleged  that  John  Wyatt,  of  Birmingham,  thirty  years 
before  the  date  of  Arkwright's  patent,  had  elaborated  a 
machine  for  spinning  by  rollers.  But  in  a  work  of  this 
description  it  is  impossible  to  analyze  the  conflicting  claims 
of  rival  inventors  to  the  credit  of  discovering  particu- 
lar machinery;  and  the  historian  can  do  no  more  than 
record  the  struggles  of  those  whose  names  are  associated 
with  the  improvements  which  he  is  noticing.  Richard 
Arkwright,  like  John  Hargreaves,  had  a  humble  origin. 
Ilargreaves  began  life  as  a  poor  weaver;  Arkwright,  as  a 
barber's  assistant.  Hargreaves  had  a  fitting  partner  in  his 
industrious  wife  Jenny.  Mrs.  Arkwright  is  said  to  have 
destroyed  the  models  which  her  husband  had  made.  But 
Arkwright  was  not  deterred  from  his  pursuit  by  the  poverty 
of  his  circumstances  or  the  conduct  of  his  wife.  "After 
many  years'  intense  and  painful  application,"  he  invented 
his  memorable  machine  for  spinning  by  rollers ;  and  laid  the 
foundations  of  the  gigantic  industry  which  has  done  more 
than  any  other  trade  to  concentrate  in  this  country  the  wealth 


,  ,( 


r-j 


}; 


4  m 


40 


ECONOMIC  HISTORY. 


of  the  world.  The  principle  of  Arkwright's  great  invention 
is  very  simple.  He  passed  the  thread  over  two  pairs  of  rol- 
lers,  one  of  which  was  made  to  revolve  much  more  rapidly 
than  the  other.  The  thread,  after  passing  over  the  pair 
revolving  slowly,  was  drawn  into  the  requisite  tenuity  by  the 
rollers  revolving  at  a  higher  rapidity.  By  this  simple  but 
memorable  invention  Arkwright  succeeded  in  producing 
thread  capable  of  employment  as  warp.  From  the  circum- 
stance that  the  mill  at  which  his  machinery  was  first  erected 
was  driven  by  water  power,  the  machine  received  the  some- 
what inappropriate  name  of  the  water-frame;  the  thread 
spun  by  it  was  usually  called  the  water-twist. 

The  invention  of  the  fly-shuttle  by  John  Kay  had  enabled 
the  weavers  to  consume  more  cotton  than  the  spinsters  had 
been  able  to  provide;  the  invention  of  the  spinning- jenny 
and  the  water-frame  would  have  been  useless  if  the  old  sys- 
tem of  hand-carding  had  not  been  superseded  by  a  more 
efficient  and  more  rapid  process.  Just  as  Arkwright  applied 
rotatory  motion  to  spinning,  so  Lewis  Paul  introduced 
revolving  cylinders  for  carding  cotton.  Paul's  machine 
consisted  of  "a  horizontal  cylinder,  covered  in  its  whole 
circumference  with  parallel  rows  of  cards  with  intervening 
spaces,  and  turned  by  a  handle.  Under  the  cylinder  was  a 
concave  frame,  lined  internally  with  cards  exactly  fitting 
the  lower  half  of  the  cylinder,  so  that  when  the  handle  was 
turned,  the  cards  of  the  cylinder  and  of  the  concave  frame 
worked  against  each  other  and  carded  the  wool."  "The 
cardings  were  of  course  only  of  the  length  of  the  cylinder, 
but  an  ingenious  apparatus  was  attached  for  making  them 
into  a  perpetual  carding.  Each  length  was  placed  on  a  flat 
broad  ribbon  which  was  extended  between  two  short  cylin- 
ders and  which  wound  upon  one  cylinder  as  it  unwound  from 
the  other."! 

This  extraordinary  series  of  inventions  placed  an  almost 
unlimited  supply  of  yarn  at  the  disposal  of  the  weaver.  But 
the  machinery  which  had  thus  been  introduced,  was  still 

»  Baines'  "  History  of  the  Cotton  Manufacture,"  p.  173,  from  which  work 
the  preceding  quotations  are  also  taken. 


THE  GREAT  INVENTIONS. 


41 


incapable  of  providing  yarn  fit  for  the  finer  qualities  of  cot- 
ton cloth.  "The  water-frarao  spun  twist  for  warps,  but  it 
could  not  be  advantageously  used  for  the  finer  qualities,  as 
thread  of  great  tenuity  has  not  strength  to  bear  the  pull  of 
the  rollers  when  winding  itself  on  the  bobbin."  This  defect, 
however,  was  removed  by  the  ingenuity  of  Samuel  Crompton,  a 
younj^  weaver  residing  near  Bolton.  Crompton  succeeded  in 
coml)ining  in  one  machine  the  various  excellences  of  "Ark- 
wrijrht's  water-trame  and  Hargreaves'  jenny."  Like  the  for- 
mer, his  machine,  which  from  its  nature  is  happily  called  the 
mule,  "  has  a  system  of  rollers  to  reduce  the  roving;  and,  like 
the  latter,  it  has  spindles  without  bobbins  to  give  the  twist, 
and  the  thread  is  stretched  and  spun  at  the  same  time  by  the 
spindles  after  the  rollers  have  ceased  to  give  out  the  rovo. 
The  distinguishing  feature  of  the  mule  is  that  the  spindles, 
instead  of  being  stationary,  as  in  both  the  other  machines, 
are  placed  on  a  movable  carriage,  which  is  wheeled  out  to 
the  distance  of  fifty-four  or  fifty-six  inches  from  the  roller 
beam,  in  order  to  stretch  and  twist  the  thread,  and  wheeled 
in  again  to  wind  it  on  the  spindles.  In  the  jenny,  the  clasp 
which  held  the  rovings  was  drawn  back  by  the  hand  from  the 
spindles;  in  the  mule,  on  the  contrary,  the  spindles  recede 
from  the  clasp,  or  from  the  roller  beam,  which  acts  as  a 
clasp.  The  rollers  of  the  mule  draw  out  the  roving  much 
loss  than  those  of  the  water-frame,  and  they  act  like  the 
clasp  of  the  jenny  by  stopping  and  holding  fast  the  rove, 
after  a  certain  quantity  has  been  given  out,  while  the  spin- 
dles continue  to  recede  for  a  short  distance  farther,  so  that 
the  draught  of  the  thread  is  in  part  made  by  the  receding  of 
the  spindles.  By  this  arrangement,  comprising  the  advan- 
tages both  of  the  roller  and  the  spindles,  the  thread  is 
stretched  more  gently  and  equably,  and  a  much  finer  quality 
of  yarn  can  therefore  be  produced. "  * 

The  effects  of  Crompton's  great  invention  may  be  stated 
;  cpigrammatically.     Before  Crompton's  time  it  was  thought 
impossible  to  spin  eighty  hanks  to  the  pound.     The  mule 


*  Balnea's  "  History  of  the  Cotton  Manufacture,"  pp.  107, 198. 


12 


ECONOMIC  HISTORY. 


has  spun  three  hundred  and  fifty  hanks  to  the  pound !  The 
natives  of  India  could  spin  a  pound  of  cotton  into  a  thread 
one  hundred  and  nineteen  miles  long.  The  English  suc- 
ceeded in  spinning  the  same  thread  to  a  li  of  one  hun- 
dred and  sixty  miles.'  Yarn  of  the  finest  quality  was  at 
once  at  the  disposal  of  the  weaver,  and  an  opportunity  was 
afforded  for  the  production  of  an  indefinite  quantity  of  cotton 
yarn.  But  the  great  inventions  which  have  been  thus  enu- 
merated would  not  of  themselves  have  been  sufficient  to 
establish  the  cotton  manufacture  on  its  present  basis.  The 
ingenuity  of  Hargreaves,  Arkwright,  and  Crompton  had 
been  exercised  to  provide  the  weaver  with  yarn.  Their  in- 
ventions had  provided  him  with  more  yarn  than  he  could  by 
any  possibility  use.  The  spinster  had  beaten  the  weaver, 
just  as  the  weaver  had  previously  beaten  the  spinster,  and 
the  manufacture  of  cotton  seemed  likely  t'^  stand  still  be- 
cause the  yarn  could  not  be  woven  morf  lidly  than  an 
export  workman  with  Kay's  improved  shuttle  could 
weave  it. 

Such  a  result  was  actually  contemplated  by  some  of  the 
leading  manufacturers,  and  such  a  result  might  possibly  have 
temporarily  occurred  if  it  had  not  been  averted  by  the  inge- 
nuity of  a  Kentish  clergyman.  Edmund  Cartwright,  a  clergy- 
man residing  in  Kent,  happened  to  be  staying  at  Matlock  in 
the  summer  of  1784,  and  to  be  thrown  into  the  company  of 
some  Manchester  gentlemen.  The  conversation  turned  on 
Arkwright's  machinery,  and  "  one  of  the  company  observed 
that  as  soon  as  Arkwright's  patent  expired  so  many  mills 
would  be  erected  and  so  much  cotton  spun  that  hands  would 
never  be  found  to  weave  it."  Cartwright  replied  that  "Ark- 
wright must  then  set  his  wits  to  work  to  invent  a  weaving 
mill."  The  Manchester  gentlemen,  however,  unanimously 
agreed  that  the  thing  was  impracticable.  Cartwright  "con- 
troverted the  impracticability  by  remarking  that  there  had 
been  exhibited  an  automaton  figure  which  played  at  chess; 
it  could  not  be  "  more  difficult  to  construct  a  machine  that  j 

1  Baines's  "  History  of  the  Cotton  Manufacture,  p.  200,  and  "  Colcliester," 
vol.  ii.  p.  75. 


THE  GREAT  INVENTIONS. 


48 


flhall  wcavo  than  ono  which  shall  make  all  the  variety  of 
inovcs  which  are  required  in  that  complicated  game." 
Witliin  three  years  ho  had  himself  proved  that  the  invention 
wn»  practicable  by  producing  the  power-loom.  Subsequent 
inventors  improved  the  idea  which  Cartwright  had  origi- 
nated, and  within  fifty  years  from  the  date  of  his  memorable 
virtit  to  Matlock  there  were  not  less  than  100,000  power- 
lofiins  at  work  in  Great  Britain  alone. ^ 

The  inventions  which  have  been  thus  enumerated  arc  the 
most  remarkable  of  the  improvements  which  stimulated  the 
development  of  the  cotton  industry.  But  other  inventions, 
less  f^enerally  remembered,  were  hardly  less  wonderful  or 
less  Ixmcficial  than  these.  Up  to  the  middle  of  last  century 
cotton  could  only  bo  bleached  by  the  cloth  being  steeped  in 
alkaline  lyes  for  several  days,  waslicd  clean,  and  spread  on 
the  ffvass  for  some  weeks  to  dry.  The  process  had  to  be  re- 
peated several  times,  and  many  months  were  consumed  before 
the  tedious  operation  was  concluded.  Scheelc,  the  Swedish 
philosopher,  discovered  in  1~74  the  bleaching  properties  of 
chlorine,  or  oxymuriatic  acid.  Bcrthollet,  the  French 
chemist,  conceived  in  1785  the  idea  of  applying  the  acid  to 
bloatliing  cloth.  Watt,  the  inventor  of  the  steam-engine, 
and  Henry  of  Manchester,  respectively  introduced  the  new 
acid  into  the  bleach-fields  of  Macgregor  of  Glasgow  and 
Ridjrway  of  Bolton.  The  process  of  bleaching  was  at  once 
reduced  from  months  to  days,  or  even  hours. ^ 

In  the  same  year  in  which  Watt  and  Henry  were  introdu- 
cing the  new  acid  to  the  bleacher.  Bell,  a  Scotchman,  was 
laying  the  foundations  of  a  trade  in  printed  calicoes.  "  The 
old  method  of  printing  was  by  blocks  of  sycamore,  about  ten 
inches  long  by  five  broad,  on  the  surface  of  which  the  pat- 
tern was  cut  in  relief  in  the  common  method  of  wood  en- 
graving." As  the  block  had  to  be  applied  to  the  cloth  by 
hand,  "  no  more  of  it  could  be  printed  at  once  than  the  block 
could  cover,  and  a  single  piece  of  calico,  twenty-eight  yards 
in  length,  required  the  application  of  the  block  four  hundred 

1  Baines's  "  Cotton,"  pp.  229,  236. 
a  Ibid.,  pp.  247-249. 


44 


ECONOMIC  HISTORY. 


and  forty-eight  times. "  ^  This  clumsy  process  was  superseded 
by  cylinder  printing.  "A  polished  copper  cylinder,  several 
feet  in  length  and  three  or  four  inches  in  diameter,  is  en- 
graved with  apatte"*u  round  its  whole  circumference  and  from 
end  to  end.  It  is  then  placed  horizontally  in  a  press,  and,  as  it 
revolves,  the  lower  part  of  the  circumference  passes  through 
the  coloring  matter,  which  ip  dgain  reiuoved  from  the  whole 
surface  of  the  cylinder,  except  the  engraved  pattern,  by  an 
elastic  steel  blade  placed  in  contact  with  the  cylinder,  and 
reduced  to  so  fine  and  straight  an  edge  as  to  take  off  tlie 
color  without  scratching  the  copper.  The  color  being  thus 
left  only  in  the  engraved  pattern,  the  piece  of  calico  or 
muslin  is  drawn  tightly  over  the  cylinder,  which  revolves 
in  the  same  direction,  and  prints  the  cloth."  The  sav- 
ing of  labor  "effected  by  the  machine"  is  "immense;  one 
of  the  cylinder  machines,  attended  by  a  man  and  a  boy, 
is  actually  capable  of  producing  as  much  work  as  could 
be  turned  out  by  one  hundred  block  printers,  and  as  many 
tear  boys."^ 

Such  are  the  leading  inventions  which  made  Great  Britain 
in  less  than  a  century  the  wealthiest  country  in  the  world. 
"When  we  undertook  the  cotton  manufacture  we  had  com- 
paratively few  facilities  for  its  prosecution,  and  had  to 
struggle  with  the  greatest  difficulties.  The  raw  material 
was  produced  at  an  immense  distance  from  our  shores,  and 
in  Hindustan  and  in  China  the  inhabitants  had  arrived  at 
such  perfection  in  the  arts  of  spinning  and  weaving  that  the 
lightness  and  delicacy  of  their  finest  cloths  emulated  the 
web  of  the  gossamer,  and  seemed  to  set  competition  at  defi- 
ance. Such,  however,  has  been  the  influence  of  the  stupen- 
dous discoveries  and  inventions  of  Hargreaves,  Arkwright, 
Crompton,  Cartwright,  and  others,  that  we  have  overcome 
all  these  difficulties, —  that  neither  the  extreme  cheapness  of 
labor  in  Hindustan,  nor  the  excellence  to  which  the  natives 
had  attained,  has  enabled  them  to  withstand  the  competition 
of  those  who  buy  their  cotton,  and  who,  after  carrying  it 

1  Balnea's  "  Cotton,"  pp.  264,  266. 
3  Ibid.,  pp.  266,  266. 


i 


THE  GREAT  INVENTIONS. 


45 


five  thousand  miles  to  be  manufactured,  carry  back  the  goods 
to  them. "  1 

If  (jrreat  Britain  entirely  monopolized  the  woollen  and  the 
cotton  trades,  she  had  done  her  best,  in  her  own  way,  to 
nroinote  the  manufacture  of  linen  in  Ireland.  In  1698  Par- 
liament, while  rigorously  prohibiting  the  exportation  of 
Irish  woollen  goods,  sedulously  attempted  to  encourage  the 
linen  manufacture  in  Ireland.  Bounties  were  paid  on  all 
linen  goods  imported  into  this  country  from  the  sister 
island;  and  the  great  linen  trade  acquired,  especially  in 
Ulster,  the  importance  which  it  still  retains.  In  1800 
31,978,039  yards  of  linen  were  exported  from  Ireland  to 
Great  Britain,  and  2,585,829  yards  to  other  countries.  In 
1815  the  export  trade  had  risen  to  37,986,359  and  5,496,206 
yards  respectively.  A  formidable  rival  to  Ulster  was,  how- 
ever, slowly  rising  in  another  part  of  the  kingdom.  At  the 
close  of  the  great  French  war  Dundee  was  still  an  insignifi- 
cant manufacturing  town,  but  the  foundations  were  already 
laid  of  the  surprising  supi'cmacy  which  she  has  since  ac- 
quired in  the  linen  trade.  Some  three  thousand  tons  of  flax 
were  imported  into  the  Scotcn  port  in  1814.  But  the  time 
was  ra{)idly  coming  when  the  shipments  of  linen  from  this 
single  place  were  to  exceed  those  from  all  Ireland,  and  Dun- 
dee was  to  be  spoken  of  by  professed  economists  as  the  Man- 
chester of  the  linen  trade.  ^ 

The  silk  manufacturers  of  Britain  have  never  yet  succeeded 
in  acquiring  the  predominance  which  the  woollen,  cotton, 
and  linen  factors  have  virtually  obtained.  The  worm  by 
which  the  raw  material  is  produced  has  never  been  accli- 
jmatized  on  a  large  scale  in  England;  and  the  trade  has  natu- 
rally flourished  chiefly  in  those  countries  where  the  worm 
j  could  live  and  spin,  or  where  the  raw  material  could  be  the 
[most  easily  procured.  Insular  prejudice,  moreover,  should 
not  induce  the  historian  to  forget  another  reason  which  has 
materially  interfered  with  the  development  of  this  particular 
j  trade.    The  ingenuity  of  the  British  was  superior  to  that  of 

'  McCuUoch's  •'  Commercial  Diet.,"  ad  verb.  Cotton. 

'  McCuUocli,  ad  verb.  Linen;  Porter's  " Progress  of  the  Nation,"  p.  280. 


46 


ECONOMIC  HISTORY. 


every  other  nation ;  but  the  taste  of  the  British  was  inferior 
to  that  of  most  people.  An  article  which  was  only  worn  by 
the  rich,  and  which  was  only  used  for  its  beauty  and  deli- 
cacy, was  naturally  produced  most  successfully  by  the  most 
artistic  people.  English  woollen  goods  found  their  way  to 
every  continental  nation;  but  the  wealthy  English  imported 
their  finest  lustrings  and  a  lea  modes  from  Italy  and  France. 
The  silk  trade  would,  in  fact,  have  hardly  found  a  home  in 
England  at  all  had  it  not  been  for  the  folly  of  a  neighboring 
potentate.  Louis  XIV.,  in  a  disastrous  hour  for  France, 
revoked  the  Edict  of  Nantes ;  and  the  French  Huguenots,  to 
their  eternal  honor,  preferring  their  consciences  to  t'^^ir 
country,  sought  a  home  among  a  more  liberal  people.  The 
silk  weavers  of  France  settled  in  Spitalfields,  and  the  British 
silk  trade  gained  rapidly  on  its  foreign  rivals.  Parliament 
adopted  the  usual  clumsy  contrivances  to  promote  an  indus- 
try whose  importance  it  was  no  longer  possible  to  ignore. 
Prohibitory  duties,  designed  to  discourage  the  importation 
of  foreign  silk,  were  imposed  by  the  legislature ;  monopolies 
were  granted  to  successful  throwsters,  and  every  precaution 
was  taken  which  the  follies  of  protection  could  suggest,  to 
perpetuate  the  supremacy  which  Great  Britain  was  gradually 
acquiring  in  the  silk  trade.  The  usual  results  followed  this 
short-sighted  policy.  Prohibitory  duties  encouraged  smug- 
gling. Foreign  silk  found  its  way  into  England,  and  the 
revenue  was  defrauded  accordingly.  The  English  trade 
began  to  decline,  and  Parliament  again  interfered  to  pro- 
mote its  prosperity.  In  that  unhappy  period  of  English 
history  which  succeeds  the  fall  of  Chatham  and  the  rise  of 
Pitt,  Parliament  adopted  fresh  expedients  to  promote  the 
prosperity  of  the  silk  trade.  Prohibitory  duties  were  re- 
placed with  actual  prohibition,  and  elaborate  attempts  were 
made  to  regulate  the  wages  of  the  Spitalfields  weavers.  The 
natural  consequences  ensued.  Smuggling,  which  had  been 
created  by  prohibitive  duties,  flourished  with  fresh  vitality 
under  the  infiuence  of  actual  prohibition.  The  capitalists 
transferred  their  mills  from  Spitalfields,  where  the  labors] 
of  their  workmen  were  fixed  by  law,  to  Macclesfield  ai 


I; 


THE  GREAT  INVENTIONS. 


47 


other  places,  where  master  and  workmen  were  free  to  make 
their  own  terms. 

The  silk  trade  was  hardly  being  developed  with  the  same 
rapidity  as  the  three  other  textile  industries.  But  silk, 
like  wool,  cotton,  and  linen,  was  affording  a  considerable 
amount  of  employment  to  a  constantly  growing  population. 
The  textile  industries  of  this  country  could  not  indeed  have 
acquired  the  importance  which  they  have  since  obtained,  if 
the  inventions  of  Hargreaves,  Arkwright,  Crompton,  and 
CartTright  had  not  been  supplemented  by  the  labors  of  ex- 
plorers in  another  field.  Machinery  makes  possible  what 
man  by  manual  labor  alone  would  find  it  impossible  to  per- 
form. But  machinery  would  be  a  useless  incumbrance  were 
it  not  for  the  presence  of  some  motive  power.  From  the 
earliest  ages  men  have  endeavored  to  supplement  the  brute 
force  of  animals  with  the  more  powerful  forces  which  nature 
has  placed  at  their  disposal.  The  ox  was  not  to  be  perpetu- 
ally used  to  tread  out  the  corn ;  women  were  not  always  to 
pass  their  days  laboriously  grinding  at  a  mill.  The  move- 
ment of  the  atmosphere,  the  flow  of  running  water,  were  to 
be  taken  into  alliance  with  man ;  and  the  invention  of  wind- 
mills and  water-mills  was  to  mark  an  advance  in  the  onward 
march  of  civilization.  But  air  and  water,  mighty  forces  as 
they  are,  proved  but  fickle  and  uncertain  auxiliaries.  When 
the  wind  was  too  low  its  strength  was  insufficient  to  turn  the 
cumbrous  sails  of  the  mill ;  when  it  was  too  high  it  deranged 
the  complicated  machinery  of  the  miller.  The  miller  who 
trusted  to  water  was  hardly  more  fortunate  than  the  man 
who  relied  upon  air.  A  summer  drought  reduced  the  power 
of  his  wheel  at  the  very  time  when  long  days  and  fine 
weather  made  him  anxious  to  accomplish  the  utmost  possi- 
ble amount  of  work.  A  flood  swept  away  the  dam  on  which 
his  mill  depended  for  its  supply  of  water.  An  admirable 
auxiliary  during  certain  portions  of  each  year,  water  was 
occasionally  too  strong,  occasionally  too  weak,  for  the  pur- 
poses of  the  miller. 

The  manufacturing  industry  of  the  country  stood,  there- 
fore, in  need  of  a  new  motive  power ;  and  invention,  which 


I      : 


48 


ECONOMIC  HISTORY. 


is  supposed  by  some  thinkers  to  depend  like  other  commod- 
ities on  the  laws  of  demand  and  supply,  was  busily  elaborat- 
ing a  new  problem, — the  use  of  a  novel  power,  which  was  to 
revolutionize  the  world.  The  elasticity  of  hot  water  had 
long  been  noticed,  and  for  a  century  and  a  half  before  the 
period  of  this  history  a  few  advanced  thinkers  had  been 
speculating  on  the  possibility  of  utilizing  the  expansive 
powers  of  steam.  The  Marquis  of  Worcester  had  described, 
in  his  "Century  of  Inventions,"  "an  admirable  and  most 
forcible  way  to  drive  up  water  by  means  of  fire."  Steam 
was  actually  used  early  in  the  eighteenth  century  as  a  mo- 
tive power  for  pumping  water  from  mines ;  and  Newconien, 
a  blacksmith  in  Dartmouth,  invented  a  tolerably  efficient 
steam-engine.  It  was  not,  however,  till  1769  that  James 
Watt,  a  native  of  Greenock,  and  a  mathematical  instrument- 
maker  in  Glasgow,  obtained  his  first  patent  for  "methods  of 
lessening  the  consumption  of  steam,  and  consequently  of 
fuel,  in  fire-engines."  James  Watt  was  born  in  1736.  His 
father  was  a  magistrate,  and  had  the  good  sense  to  encour- 
age the  good  turn  for  mechanics  which  his  son  displayed  at 
a  very  early  age.  At  the  age  of  nineteen  Watt  was  placed 
with  a  mathematical  instrument-maker  in  London.  But 
feeble  health,  which  had  interfered  with  his  studies  as  a 
boy,  prevented  him  from  pursuing  his  avocations  in  England. 
Watt  returned  to  his  native  country.  The  Glasgow  body  of 
Arts  and  Trades,  however,  refused  to  allow  him  to  exercise 
his  calling  within  the  limits  of  their  jurisdiction;  and  had  it 
not  been  for  the  University  of  Glasgow,  which  befriended 
him  in  his  difficulty,  and  appointed  him  their  mathematical 
instrument-maker,  the  career  of  one  of  the  greatest  geniuses 
whom  Great  Britain  has  produced  would  have  been  stinted 
at  its  outset. 

There  happened  to  be  in  the  University  a  model  of  New- 
comcn's  engine.  It  happened,  too,  that  the  model  was 
defectively  constructed.  Watt,  in  the  ordinary  course  of 
his  business,  was  asked  to  remedy  its  defects,  and  he  poon 
succeeded  in  doing  so.  But  his  examination  of  the  model 
convinced  him  of  serious  faults  in  the  original.     Newcomen 


THE  GREAT  INVENTIOXS. 


49 


had  injected  cold  water  into  the  cylinder  in  order  to  con- 
dense the  steam  and  thus  obtain  a  necessary  vacuum  for  the 
piston  to  work  in.     Watt  discovered  that  three  fourths  of 
the  fuel  which  the  engine  consumed  was  required  to  reheat 
the  cylinder.     "  It  occurred  to  him  that  if  the  condensation 
could  be  performed  in  a  separate  vessel,  communicating  with 
the  cylinder,  the  latter  could  be  kept  hot  while  the  former 
was  cooled,  and  the  vapor  arising  from  the  injected  water 
could  also  be  prevented  from  impairing  the  vacuum.     The 
communication  could  easily  be  effected  by  a  tube,  and  the 
water  could  be  pumped  out.     This  is  the  first  and  the  grand 
invention  by  which  he  at  once  saved  three  fourths  of  the  fuel, 
and  increased  the  power  one  fourth,  thus  making  every  pound 
of  coal  produce  five  times  the  force  formerly  obtained  from 
it."'    But  Watt  was  not  satisfied  with  this  single  improve- 
ment.    Ho  introduced  steam  above  as  well  as  below  the 
piston,  and  thus  again  increased  the  power  of  the  machine. 
He  discovered  the  principle  of  parallel  motion,  and  thus 
made  the  piston  move  in  a  true  straight  line.     He  regulated 
the  supply  of  water  to  the  boiler  by  the  means  of  "floats," 
jthe  supply   of  steam   to  the   cylinder  by    the   application 
I  of  "the  governor,"  and,  by  the  addition  of  all  these  discov- 
I cries,  "satisfied  himself  that  he  had  almost  created  anew 
I  engine,  of  incalculable  power,  universal  application,  and  in- 
estimable value.  "2     It  is  unnecessary  to  relate   in  these 
pages  the  gradual  introduction  of  the  new  machine  to  the 
manufacturing  putlic.     Watt  was  first  connected  with  Dr. 
Roebuck,  an  iron-master  of  Glasgow.     But  his  name  is  per- 
manently associated  with  that  of  Mr.  Boulton,  the  proprietor 
of  the  Soho  Works  near  Birmingham,  »vhose  partr^er  he  be- 
Icame  in  1774.     Watt  and  Boulton  rapidly  supplemented  the 
lorigiiml  invention  with  further  improvements.     Other  in- 
jvcutors  succeeded  in  the  same  field,  and  by  the  beginning  of 
jthe  present  century  steam  was  established  as  a  new  force ; 
ladvanccd  thinkers  were  considering  the  possibility  of  apply- 
jing  it  to  purposes  of  locomotion. 

>  Lord  Brouglmm's  "  Men  of  Letters  and  Science,"  p.  367. 
2  Ibid.,  p  371. 


■^Vn' 


50 


ECONOMIC  HISTORY. 


The  steam-engine  indeed  would  not  have  been  invented  in 
the  eighteenth  century,  or  would  not  at  any  rate  have  been 
discovered  in  this  country,  if  it  had  not  been  for  the  vast 
mineral  wealth  with  which  Great  Britain  has  fortunately 
been  provided.     Iron,  the  most  useful  of  all  metals,  presents 
greater  difficulties  than  any  other  of  them  to  the  manufac- 
turer, and  iron  was  probably  one  of  the  very  last  minerals 
which  was  applied  to  the  service  of  man.     Centuries  elapsed 
before  the  rich  mines  of  our  own  country  were  even  slightly 
worked.      The   Romans  indeed  established  iron  works  in 
Gloucestershire,  just  as  they  obtained  tin  from  Cornwall  or 
lead  from  Wales.     But  the  British  did  not  imitate  the  ex 
ample  of  their  earliest  conquerors,  and  the  little  iron  which 
was  used  in  this  country  was  imported  from  abroad.     Some 
progress  was,  no  doubt,  made  in  the  southern  counties,  —  the 
smelters  naturally  seeking  their  ores  in  those  places  where 
wood,  then  the  only  available  fuel,  was  to  be  found  in  abun- 
dance.    The  railings  which  but  lately  encircled  our  metro- 
politan cathedral  were  cast  in  Sussex.     But  the  prosperity 
of  the  trade  involved  its  own  ruin.     Iron  could  not  be  made 
without  large  quantities  of  fuel.     The  wood  gradually  dis- 
appeared before  the  operations  of  the  smelter,  and  the  coun- 
try gentlemen  hesitated  to  sell  their  trees  for  fuel  when  the  I 
increase  of  shipping  was  creating  a  growing  demand  for 
timber.     Nor  were  the  country  gentlemen  animated  in  this 
respect  by  purely  selfish  motives.     Parliament  itself  shared 
their  apprehensions  and  endorsed  their  views.     It  regarded 
the  constant  destruction  of  timber  with  such  disfavor  that  it 
seriously  contemplated  the  suppression  of  the  iron  trade  as] 
the  only  practical  remedy.     "Many  think,"  said  a  contem- 
porary writer,  "that  there  should  be  no  works  anywhere, 
they  so  devour  the  woods. "  ^    Fortunately,  so  crucial  a  rem- 
edy was  not  necessary.     At  the  commencement  of  the  seven- 
teenth century.  Dud  Dudley,  a  natural  son  of  Lord  Dudley, 
had  proved  the  feasibility  of  smelting  iron  with  coal;  but| 
the  prejudice  and  ignorance  of  the  work-people  had  pre- 
vented the  adoption  of  his  invention.     In  the  middle  of  the  | 

1  Smiles'8  "  Industrial  Biogrnphy,"  p.  43. 


'T'l'U 


m 


THE  GREAT  JNVEaWTIONS. 


61 


eii'hteenth  century  attention  was  again  drawn  to  his  pro- 
cess and  the  possibility  of  substituting  coal  for  wood  was 
conclusively  established  at  the  Darby's  works  at  Coalbrook 
Dale.  The  impetus  which  was  thus  given  to  the  iron  trade 
was  extraordinary.  The  total  produce  of  the  country 
amounted  at  the  time  to  only  eighteen  thousand  tons  of  iron 
a  year,  four  fifths  of  the  iron  used  being  imported  from 
Sweden.  In  1802  Great  Britain  possessed  one  hundred  and 
sixty-eight  blast-furnaces,  and  produced  170,000  tons  of 
iron  annually.  In  1806  the  produce  had  risen  to  250,000 
tons;  it  had  increased  in  1820  to  400,000  ton?  Fifty  years 
afterwards,  or  in  1870,  6,000,000  tons  of  iron  were  produced 
from  British  ores.  * 

The  progress  of  the  iron  trade  indicated,  of  course,  a  cor- 
responding development  of  the  supply  of  coal.  Coal  had 
been  used  in  England  for  domestic  purposes  from  very  early 
periods.  Sea  coal  had  been  brought  to  London;  but  the 
citizens  had  complained  that  the  smoke  was  injurious  to 
their  health,  and  had  persuaded  the  legislature  to  forbid  the 
use  of  coal  on  sanitary  grounds.  The  convenience  of  the 
new  fuel  triumphed,  however,  over  the  arguments  of  the  sani- 
tarians and  the  prohibitions  of  the  legislature,  and  coal 
continued  to  be  brought  in  constantly  though  slowly  increas- 
ing quantities  to  London.  Its  use  for  smelting  iron  led  to 
new  contrivances  for  ensuring  its  economical  production. 
Before  the  commencement  of  the  present  century  there  were 
two  great  difficulties  which  interfered  with  the  operations  of 
the  miner.  The  roof  of  the  mine  had  necessarily  to  be 
propped,  and,  as  no  one  had  thought  of  using  wood,  and  coal 
itself  was  employed  for  the  purpose,  only  sixty  per  cent  of 
the  produce  of  each  mine  was  raised  above  ground.  About 
the  licjrinning  of  the  nineteenth  century  timber  struts  were 
gradually  substituted  for  the  pillars  of  coal,  and  it  became 
consequently  possible  to  raise  from  the  mine  all  the  coal 
won  by  the  miner.     A  still  more  important  discovery  was 

'  "nict.  Hist."  vol.  iv.  p.  680;  McCtilloch,  "Diet,  of  Commerce."  ad  verb. 
Iron;  Porter's  "Progress  of  the  Nation,"  p.  520;  Statistical  Abstract  of  the 
United  Ivingdom. 


52 


ECONOMIC  HISTORY. 


made  at  the  exact  period  at  which  this  history  commences. 
The  coal-miner  in  his  underground  calling  was  constantly 
exposed  to  Mie  dangers  of  fire-damp,  and  was  liable  to  be 
destroyed  without  a  moment's  notice  by  the  most  fearful 
catastrophe.  In  the  year  in  which  the  great  French  war 
was  concluded,  Sir  Humphrey  Davy  succeeded  in  perfecting 
his  safety-lamp,  an  invention  which  enabled  the  most  dan- 
gerous mines  to  be  worked  with  comparative  safety,  and 
thus  augmented  to  an  extraordinary  extent  the  available 
supplies  of  coal.^ 

Humphrey  Davy  was  the  son  of  a  wood-carver  of  Pen- 
zance, and  early  in  life  was  apprenticed  to  a  local  apothe- 
cary. Chance  —  of  which  other  men  would  perhaps  have 
failed  to  avail  themselves  —  gave  the  lad  an  opportunity  of 
cultivating  his  taste  for  chemistry.  A  French  surgeon, 
wrecked  on  the  coast,  to  whom  Davy  had  shown  some  kind- 
ness, gave  him  a  case  of  surgical  instruments,  and  "the 
means  of  making  some  approximation  to  an  exhaust ini,' 
engine."  Watt's  son,  Gregory  Watt,  was  ordered  to  winter 
in  Cornwall  for  his  health,  and  happened  to  take  apartments 
in  the  house  of  Davy's  mother.  "Another  accident  threw 
him  in  the  way  of  Mr.  Davics  Giddy,  a  cultivator  of  natural 
as  well  as  mathematical  science."  Giddy  "gave  to  Davy 
the  use  of  an  excellent  library ; "  he  "  introduced  him  to  Dr. 
Beddoes, "  who  made  his  young  friend  the  head  of  "  a  pneu- 
matic institution  for  the  medical  use  of  gases,"  which  he 
was  then  forming.  The  publication,  soon  afterwards,  of  a 
fanciful  paper  on  light  and  heat  gave  Davy  a  considerable 
reputation.  He  was  successively  chosen  assistant  lecturer 
in  chemistry,  and  sole  chemical  professor  of  the  Royal  In- 
stitution. While  he  held  this  office  his  inquiries  induced 
him  to  investigate  the  causes  of  the  fearful  explosions  which 
continually  took  place  in  coal  mines.  He  soon  satisfied 
himself  that  carburetted  hydrogen  is  the  cause  of  fire-damp; 
and  that  it  will  not  explode  unless  mixed  with  atmospheiic 
air  "in  proportions  between  six  and  fourteen  times  its 
bulk ; "  and  "  he  was  surprised  to  observe  in  the  course  of 

1  Porter's  "  Progress  of  the  Nation,"  p.  277 ;  McCuUoch,  ad  verb.  Coal. 


THE  GREAT  INVENTIONS. 


53 


his  experiments,  made  for  ascertaining  how  the  inflamma- 
tion takes  place,  that  the  flames  will  not  pass  through  tubes 
of  a  certain  length  and  smallness  of  bore.  He  then  found 
that,  if  the  length  be  diminished  and  the  bore  also  reduced, 
the  flames  will  not  pass ;  and  he  further  found  that  by  mul- 
tiplying the  number  of  the  tubes  this  length  may  be  safely 
(liniinished,  provided  the  bore  be  proportionally  lessened. 
Ilonce  it  appeared  that  gauze  of  wire,  whose  meshes  were 
only  one  twenty-second  of  an  inch  in  diameter,  stopped  the 
flame  and  prevented  the  explosion."*  These  successive 
discoveries,  the  results  of  repeated  experiments  and  careful 
thought,  led  to  the  invention  of  the  safety-lamp.  The  first 
safety-lamp  was  made  in  the  year  1815.  There  is  some  sat- 
isfaction in  reflecting  that  the  very  year  which  was  memo- 
rable for  the  conclusion  of  the  longest  and  most  destructive 
of  modern  wars,  was  also  remarkable  for  one  of  the  most 
beneficial  discoveries  which  have  ever  been  given  to  man- 
kind. Even  the  peace  of  Paris  did  not  probably  save  more 
life  or  avert  more  suffering  than  Sir  Humphrey  Davy's  in- 
vention. The  gratitude  of  a  nation  properly  bestowed  titles 
and  pensions,  lands  and  houses,  stars  and  honors,  on  the 
conqueror  of  Napoleon.  Custom  and  precedent  only  allowed 
inferior  rewards  to  the  inventor  of  the  safety-lamp.  Yet 
Hargreavcs  and  Arkwright,  Crompton  and  Cartwright,  Watt 
and  Davy,  did  more  for  the  cause  of  mankind  than  even 
Wellington.  Their  lives  had  more  influence  on  their  coun- 
try's future  than  the  career  of  the  great  general.  His 
victories  secured  his  country  peace  for  rather  more  than  a 
sreneration.  Their  inventions  gave  Great  Britain  a  commer- 
cial 8U|)rcmacy  which  neither  war  nor  foreign  competition 
has  yet  destroyed. 

A  series  of  extraordinary  inventions,  at  the  commence- 
ment of  the  present  century,  had  supplied   Great  Britain 
I  with  a  new  manufacturing  vigor.     Hargreaves,  Arkwright, 
j  Crompton,  and  Cartwright  had  developed,  to  a  remarkable 
I  degree,  the  producing  power  of  man ;  Watt  had  given  a  new 

'  See  Brougham's  "  Men  of  Letters  and  Science,"  p.  462.    The  life  of  Davy 
I  is  admirably  told  by  Lord  Brougham. 


f,'l 


54 


ECONOMIC  HISTORY. 


signifioance  to  their  inventions  by  superseding  the  feeble 
and  unequal  forces  which  had  hitherto  been  used,  with  the 
most  tractable  and  powerful  of  agents.  And  Davy,  by  his 
beneficent  contrivance,  had  enabled  coal  to  be  won  with 
less  danger,  and  had  relieved  the  miner's  life  from  one 
of  its  most  hideous  perils.  The  ingenuity  of  these  great 
men  had  been  exercised  with  different  objects ;  but  the  in- 
ventions of  each  of  them  had  given  fresh  importance  to  the 
discoveries  of  the  others.  The  spinning-jenny,  the  water- 
frame,  and  the  mule  would  have  been  deprived  of  half  their 
value  if  they  had  not  been  supplemented  with  the  power- 
loom;  the  power-loom  would,  in  many  places,  have  been 
useless  without  the  steam-engine;  the  steam-engine  would 
have  been  idle,  had  it  not  been  for  coal;  the  coal  would 
not  have  been  won  without  danger,  had  it  not  been  for  Sir 
H.  Davy.  Coal,  then,  was  the  commodity  whose  extended 
use  was  gradually  revolutionizing  the  world;  and  the  popu- 
lation of  the  world,  as  the  first  consequence  of  the  change, 
gradually  moved  towards  the  coal  fields.  The  change  was 
just  commencing  at  the  beginning  of  the  present  century; 
it  was  proceeding  with  rapid  strides  at  the  period  at  which 
this  history  opens;  its  ultimate  effects  will  be  seen  later 
on  in  this  work.  The  time  was  to  come  when  the  coal  meas- 
ures of  England  were  to  draw  awav  the  population  of  Ire- 
land, to  weaken  the  power  of  the  southern  agricultural 
counties,  to  give  predominance  to  the  north  of  England, 
and  by  these  results  to  involve  a  political  revolution. 


Illlit', 


CAUSES  OF  THE  FREHCU  HE  VOLUTION. 


65 


III. 

ECONOMIC  CAUSES  OF  THE  FRENCH 
REVOLUTION. 

From  Von  Sydel's  French  Revolution,*  Vol.  I.  pp.  21-53. 


IN  order  to  bring  this  matter,  in  its  details,  more  clearly 
before  us,  we  may  pass  in  review  the  three  great  classes 
into  which  the  French  people  were  divided  according  to  their 
occupation. 2  By  far  the  most  important  of  these  occupa- 
tions iit  that  period  was  agriculture.  Nearly  21,000,000 
out  of  25,000,000  of  inhabitants  were  employed  in  tilling  the 
soil.  Of  the  51,000,000  hectares  of  which  the  whole  king- 
dom is  composed,  35,000,000  were  destined  for  cultivation, 
that  is,  rather  less  than  at  the  present  day,  but  more  than 
twice  as  much  as  is  now  under  cultivation  in  England.  It 
has  often  been  imagined  that  the  property  of  these  great 
masses  of  land  was  almost  entirely  in  the  hands  of  the 
church,  the  monasteries,  the  nobility,  and  the  financiers; 
and  that  before  1789  only  large  estates  existed,  while  the 
class  of  small  proprietors  was  created  by  the  Revolution. 
Some  consider  this  supposed  change  as  the  highest  glory, 
and  others  as  the  greatest  calamity  of  modern  times;  but 
all  are  agreed  as  to  the  fact,  and  the  more  so,  because  it  was 
continually  proclaimed  in  the  debates  of  the  revolutionary 
assemblies.  But  on  closer  examination  wo  shall  find  that 
the  effects  of  the  feudal  system  upon  agriculture  are  not  to 

'  London:  J.  Murray,  1867. 

'  In  drawing  up  the  following  statement  we  have  chiefly  consulted  the 
"  Statistique  nilnisterielle  de  la  France,"  and  the  admirable  works  of  Moreau 
de  Yonne ;  and  also  Lavergne,  "  Economic  rurale."  The  latter  gives  much 
information  respecting  the  earlier  state  of  things,  which  now  and  then,  however, 
requires  examination  and  correction. 


66 


ECONOMIC  HISTORY. 


be  looked  for  in  thia  direction.  We  cannot  rank  the  author- 
ity of  the  revolutionary  orators  very  high,  both  because  they 
had  a  political  interest  in  breaking  up  the  large  estates  for 
the  advantage  of  the  city  proletaries,  and  because  thcy 
always  showed  themselves  fabulously  ignorant  of  statJHtics. 
If  we  examine  the  state  of  things  before  1789  we  shall  find 
that  —  apart  from  the  feudal  tenures  and  the  church  property 
—  even  the  old  French  law  of  inheritance  by  no  nicuiis 
favored  the  accumulation  of  estates.  The  nobility,  indeed, 
were  often  heard  to  complain  that  the  roturiers  were  con- 
stantly getting  possession  of  land;  which  is  intelligible 
enough,  since  the  moneyed  classes  were  continually  gaining 
ground  on  the  ancient  aristocracy.  It  follows  that  there  was 
nothing  in  the  circumstances  of  the  age  to  render  the  division 
of  land  impossible ;  and  one  of  the  most  credible  witnesses, 
after  three  years'  investigation  in  all  the  French  p»jvincc8, 
tells  us,  as  the  result  of  his  observations,  that  about  a  tliird 
of  the  laud  was  held  by  small  proprietors,  who  were  suffi- 
ciently prosperous  in  Flanders,  Alsace,  Beam,  and  the  north 
of  Bretagne ;  but  in  other  parts,  especially  in  Lorraine  and 
Champagne,  poor  and  miserable.  The  division  of  property, 
he  observes,  is  carried  to  too  great  an  extent :  "  I  have  fre- 
quently seen  properties  of  ten  roods  with  a  single  fruit-tree; 
excessive  division  ought  to  be  forbidden  by  law."  The  wit- 
ness is  Arthur  Young,  one  of  the  first  agriculturists  of  the 
period  in  Europe,  who  gave  this  testimony  after  indefati- 
gable inquiry ;  and  his  report  is  confirmed  by  native  author- 
ities. "The  subdivision  of  land,"  says  Turgot,  "is  carried 
to  such  an  extent  that  a  property  only  * 
one  family  is  divided  among  five  or  si 
landed  estates,"  writes  an  intei 
matically  to  a  very  alarming  dc,  ;;  the 
and  subdivided  ad  infinitum."^  ,  iich  wiits 
the  small  proprietors;  the  other  two  th:  'Is 


"'"     ..'lit  for 

'     "The 

.ok'       .J)  syste- 

.ds  .    0  divided 

the  case  among 

of  the  soil  was 


entirely  in  the  possession  of  the  great  land-owners,  —  consist- 
ing partly  of  the  nobility  and  clergy,  and  partly  of  magis- 
trates and  financiers.     We  shall  presently  inquire  in  wli  ' 
'  Quoted  by  Tocqueville,  "  L'Ancien  Regime,"  p.  60. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


57 


manner  they  turned  their  lands  to  profit;  but  wo  may  first 
uf  all  <>l>>servc  that  a  middle  class  uf  proprietors,  substantial 
enoii<j;Ii  to  derive  from  their  land  a  sufficient  livelihood,  and 
yet  hinublc  enough  to  be  bound  to  constant  and  diligent  labor, 
was  ontin'ly  wanting.  In  the  present  day  the  landed  pro- 
jiric'tors  of  France  may  bo  divided  into  three  sections,  each 
of  wliiiih  possesses  about  one  third  of  the  productive  soil  of 
the  country.  Eighteen  million  hectares  belong  to  183,000 
jTicat  liinded  owners;  fourteen  millions  to  700,000  proprie- 
tors of  the  middle  class,  and  fourteen  millions  to  not  quite 
four  millions  of  peasant  owners.'  When  we  compare  these 
figiiros  with  those  of  the  pre-revolutionary  period  we  find  the 
number  of  poor  possessors  exactly  corresp(jnding  to  one  an- 
other; and,  what  is  very  remarkable,  they  are  almost  exactly 
the  same  in  1831  as  in  1815.  The  most  fearful  storms  pass 
over  the  surface  of  the  land  without  producing  any  change  in 
these  relations.  But  what  the  movement  of  1789  —  the  eman- 
cipation of  the  soil,  and  civil  equality  —  did  produce  is  this 
middle  class  of  proprietors,  which  now  possesses  one  third  of 
the  land.  It  must  be  confessed  that  this  is  a  most  remark- 
able result.  IIow  often  has  it  been  announced  by  feudalists 
and  sociiilists  that  entire  freedom  of  trade  would  inevitably 
lead  to  the  annihilation  of  the  middle  classes,  and  leave 
nothing  but  millionnaires  and  proletaries!  We  here  see 
the  very  contrary  proved  by  one  of  the  grandest  historical 
facts.  Tiie  feudal  system,  by  its  restrictions,  crushed  the 
an;ricultunil  middle  class;  the  rule  of  freedom  created  it 
afresh.  Let  us,  however,  consider  the  position  of  these  lords 
of  the  soil  and  their  dependents  more  closely. 

The  first  fact  which  meets  us  in  this  investigation  is  an 
unhappy  one.  It  was  only  an  excessively  small  minority  of 
the  great  land-owners  who  concerned  themselves  about  their 
estates  and  tenants.  All  who  were  at  all  able  to  do  so 
hurried  away  to  the  enjoyments  of  the  court  or  the  capital, 
and  onl}  returned  to  their  properties  to  fill  the  purse  which 
had  been  emptied  by  their  excesses.     There  they  lived  in 

'  Cocliut,  "Revue  de  Deux  Mondes,"  September,  1848 ;  Rossi,  "£conomie 
politique,"  p.  325,  et  seq. 


u 


68 


ECONOM  C  HISTORY. 


I 


miserly  and  shabby  retirement;  sometimes  in  wretchedly 
furnished  castles,  shunned  by  the  peasants  as  pitiless  credi- 
tors ;  sometimes  in  the  midst  o£  forests  and  wastes,  that  they 
might  have  the  pleasures  of  the  chase  close  at  hand.  They 
took  as  little  interest  in  intellectual  subjects  as  in  agricul- 
tural affairs,  and  cherished  little  or  no  intercourse  with 
their  neighbors,  —  partly  from  parsimony,  and  partly  from  the 
entire  want  of  local  roads.  When  the  period  of  fasting  was 
over,  they  rushed  eagerly  back  to  the  alluring  banquets  of 
Paris  and  Versailles.  The  number  of  exceptions  to  this 
melancholy  rule  was  so  small  as  to  exercise  no  influence  on 
the  general  condition  of  the  country. 

While  these  gentlemen  were  squandering  the  produce  of 
their  estates  in  aristocratic  splendor,  their  fields  were  let  out 
in  parcels  of  ten  or,  at  most,  fifteen  hectares,  to  the  so-called 
metayers,  who  did  not  pay  a  fixed  rent,  but  generally  half 
the  gross  produce,  and  receive^  from  the  owner,  in  return, 
their  first  seed-corn,  their  cattle,  and  agricultural  imple- 
ments.^ This  system  yielded  a  wretched  existence  for  the 
tenants  themselves,  and  reduced  the  estates  to  a  miserable 
condition,  but  it  brought  the  owners  a  large  though  uncertain 
income.  The  latter,  who  only  saw  their  estates  as  travellers, 
were  accustomed  to  farm  out  the  collection  of  their  dues, 
gri  jrally  to  a  notary  or  an  advocate,  who  treated  the  tenants 
with  merciless  scveritv. 

The  peasants,  in  their  turn,  neglected  the  cultivation  of 
corn  —  of  which  they  had  to  give  up  a  moiety  —  for  an} 
chance  occupation  the  whole  profit  of  which  fell  to  them- 
selves; they  used  their  oxen  rather  for  purposes  of  trans- 
port than  for  ploughing,  fattened  their  geese  in  their  own 
wheat  fields,  and,  above  all,  introduced  the  system  of  alter- 
nating crop  and  fallow,  ii  order  to  get  a  greater  extent  of 
pasture,  and  consequently  a  larger  number  of  cattle.  This 
was  a  personal  gain  to  themselves,  but  evidently  brought  no 
advantage  to  the  estate.  A  system  of  tillage,  in  short,  pre- 
vailed without  industry,  without  science,   and,   above  all, 

1  Quoenay  in  Daire,  "  Pliysiocratea,"  p.  219,  et  seq. ;  Young's  "  Travels," 
2d  ed.  vol.  i.  p.  355;  LulUu  de  Chatoauvieuz,  vol.  i.  p.  270. 


of  Fraiice,  (itj  frar 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


59 


without  capital.  It  lias  been  calculated  that  the  average 
amount  of  capital  employed  at  that  period  in  the  French 
mitairks  was  from  forty  to  sixty  francs  to  the  hectare  ; 
while  in  England,  at  the  same  time,  the  average  amounted  to 
two  liundred  and  forty  francs.  *  The  result  was,  of  course,  a 
wretched  one ;  they  only  reckoned  upon  a  crop  of  from  seven 
to  eight  hectolitres  of  wheat  to  the  hectare^ — the  increase 
being  from  five  to  six  fold ;  while  the  English  farmer  of  that 
time  obtained  a  twelve-fold  increase.  It  was  impossible  for 
the  peasant  under  such  circumstances  to  gain  a  livelihood; 
the  produce  of  ten  hectares  was  scarcely  sufficient  to  support 
his  family,  and  sale  and  profit  were  out  of  the  question. 
The  man  who  is  thus  condemned  to  pass  his  life  in  starva- 
tion soon  learns  to  fold  his  hands  in  idleness.  A  con- 
stantly increasing  extent  of  country  lay  uncultivated,  which 
Qiicsnay,  in  1750,  estimated  at  a  quarter  of  the  arable  land 
of  France,  and  Arthur  Young,  in  1790,  at  more  than 
9,000,000  hectares.  Millions  of  rural  dwellings  had  no 
aperture  in  them  but  the  door,  or  at  most  one  window  ;2  the 
people  had  no  clothing  but  a  home-made,  coarse,  and  yet  not 
thick,  woollen  cloth;  in  many  provinces  every  one  went 
barefoot,  and  in  others  only  wooden  shoes  were  known.  The 
food  of  the  people  was  gruel  with  a  little  lard ;  in  the  even- 
ing a  piece  of  bread,  and  on  great  occasions  a  little  bacon ; 
but  besides  this  no  meat  for  months  together,  and  in  many 
districts  no  wine  at  all.*  The  mental  condition  of  the  peo- 
ple was  in  accordance  with  their  external  circumstances. 
Books  and  newspapers  were  as  little  known  in  the  villages  as 
reading  and  writing.  The  peasants  depended  for  instruction 
on  their  pastors  and  parish  clerks,  proletaries  like  themselves, 
who  very  seldom  got  beyond  the  horizon  of  the  church  steeple. 
The  Church  was,  after  all,  the  only  institution  that  threw  an 
intolloctual  spark  into  their  wretched  life;  but  unfortunately 
their  religious  impulses  were  strongly  mixed  with  barbarism 

'  Artliur  Young,  vol.  i.  p.  436.    The  elder  Mirabeau  reckons  for  the  whole 
of  Fraiiue,  Gii  francs  to  the  arpent. 
•  This  is  still  the  case. 
'  Reports  of  the  Prefects  to  the  Ministry,  1803. 


60 


ECONOMIC  HISTORY. 


and  superstition.  In  many  large  districts  of  the  south  the 
peasants  had  no  other  idea  of  a  Protestant  than  as  of  a  dan- 
gerous magician  who  ought  to  be  knocked  on  the  head.  Their 
own  faith,  moreover,  was  interwoven  with  a  multitude  of  the 
strangest  images  of  old  Celtic  heathenism.  Of  the  world 
outside  they  heard  nothing,  for  there  was  next  to  no  traffic 
or  travelling  in  the  country.  There  were  some  royal  roads, 
magnificently  made,  and  sixty  feet  in  breadth,  —  splendid 
monuments  of  monarchical  ostentation.  On  these,  however, 
up  to  1776,  only  two  small  coaches  ran,^  throughout  the 
whole  of  France;  and  the  traveller  might  pass  whole  days 
without  getting  sight  of  any  other  vehicle.^  Only  few  vil- 
lages, in  the  most  favored  provinces,  possessed  cross-roads 
to  these  great  highways,  or  to  the  nearest  market  town. 
And  thus  the  whole  existence  of  these  people  was  passed  in 
toil  and  privation;  without  any  pleasures  except  the  sight 
of  the  gaudy  decorations  of  a  few  church  festivals;  without 
any  change,  save  when  hunger  drove  an  individual,  here  and 
there,  to  seek  day-labor  in  the  towns,  or  into  military  ser- 
vice. It  was  seldom  that  such  a  one  ever  returned  to  his 
father's  house,  so  that  his  fellow-villagers  gained  no  advan- 
tage from  his  wider  experience. 

Under  these  circumstances  the  relation  between  peasant 
and  lord  was  naturally  a  deplorable  one.  What  we  have 
already  said  suflficicntly  characterizes  a  community  in  which 
all  the  enjoyments  fell  to  the  rich,  and  all  the  burdens  were 
heaped  upon  the  poor.  In  aristocratic  England  at  this 
period,  a  quarter  of  the  gross  proceeds  was  considered  a 
high  rent  for  a  farm,  and  the  owner,  moreover,  paid  large 
tithes  and  poor-rates.  ^  In  France,  half  the  proceeds  was  the 
usual  rent ;  and  the  owners  were  exempted  by  their  privileges 
from  many  public  burdens,  which  fell  with  double  weight 
upon  the  wretched  mStayers.  Thus,  the  produce  of  the 
French  land,  as  compared  with  the  English,  was  nine  to 
fourteen,  while  the  rents  of  an  English  land-owner  were  at 

'  E.  Dairc,  "  Introduction  aux  CEuvres  de  Turgot." 

a  Young's  "  Travels." 

•  Yvernois,  "  Tableau  des  Pertes,"  etc. 


CAUSES  OF   THE  FRENCH  REVOLUTION. 


61 


the  rate  of  two  and  three  fourths  per  cent,  and  those  of  the 
French  land-owner  three  and  three  fourths  per  cent.* 

The  deficiency   in    the   product   of    the    land,    therefore, 
affected  the  gains  of  the  little  farmer  doubly.     In  addition 
to  this  he  was  burdened  by  a  number   of  feudal  services,  by 
forced  labor  on  the  lands  of  his  lord,  by  tithes  to  the  Church, 
and  by  the  obligation  to  make  roads  for  the  State.     The 
landlord,  who  tried  to  sell  his  rent  in  kind  as  dearly  as  pos- 
sible, wished  for  high  prices  of  corn;  the  peasant,  who,  after 
paying  his  dues,  did  not  raise  enough  for  his  own  family, 
longed,  like  the  city  proletary,   for  low  prices.     In   short, 
those  two  classes,  so  intimately  connected  with  one  another, 
had  nothing  at  all  in  common;   in  education,    in   interests 
and  enjoyments,  they  were  as  widely  separated  as  the  in- 
habitants of  different  quarters  of  the  globe,  and  regarded 
each  other  respectively  with  contempt  and  hatred.     When 
the  peasant  looked  upon  the  towers  of  his  lord's  castle  the 
dearest  wish  of  his  heart  was  to  burn  it  down,  with  all  its 
registers  of  debt.     Here  and  there  a  better  state  of  things 
existed;   but  we  can  only  bring  forward  two  exceptions  to 
the  melancholy  rule,  extending  over  large  tracts  of  country. 
In  Anjou  the   system  of   mStairie  prevailed,    as   in  Lower 
Bietagne  and  Guienne;  and  yet  in  the  former  province  the 
peasants  were  prosperous,  and  the  noblemen  beloved.     Lower 
Poitou  was  the  only  province  from  which  the  nobles  had  not 
allowed  themselves  to  be  enticed  into  the  whirlpool  of  court 
life.    The  nobleman  dwelt  in  his  own  castle,  the  real  lord 
of  his  domains,  the  cultivator  of  his  fields,  Ihc.  guardian  of 
his  peasants.     He  advanced  them  money  to  purchase  the 
necessary  stock,  and  instructed  them  in  the  management  of 
their  cattle ;2  the  expulsion  of  a  tenant  was  a  thing  unheard 
of;  the  laborer  was  born  on  the  estate,  and  the  landlord  was 
the  godfather  of  all  his  farmers'   children.     He  was  often 
seen  going  to  market  with  his  peasants,  to  sell  their  oxen 
for  them  as  advantageously  as  possible.     His  mental  horizon, 
however,  did  not  extend  beyond  these  honorable  care3;  he 


'  Younpf. 

'  Sauvegrain,  "  Considdrations  sur  la  Population,"  etc. 


Paris,  1803. 


62 


ECONOMIC  HISTORY. 


honored  God  and  the  King,  labored  in  his  own  fields,  was  a 
good  sportsman  and  toper,  and  knew  as  little  of  the  world 
and  its  civilization  as  his  tenants. 

In  the  north  of  the  kingdom  a  more  modern  state  of  things 
had  grown  up.  There,  wealthy  farmers  were  to  be  seen, 
who  held  their  land  on  lease  at  a  fixed  money  rental,— 
which  was  settled  according  to  the  amount  of  the  taxes  to 
which  they  were  liable,  —  and  who  brought  both  skill  and 
capital  to  the  management  of  their  land.  This  was  the 
regular  practice  in  Flanders,  Artois,  Picardy,  Normandy, 
the  Isle  of  France,  and  other  smaller  districts.  In  these 
parts  the  landlords  had  a  certain  revenue,  and  their  land 
yielded  twice  as  much  as  that  which  was  in  the  hands  of  the 
metayers.  The  whole  country  wore  the  appearance  of  a  gar- 
den, and  the  poorer  neighbors  found  lucrative  employment 
at  the  stately  farmhouses.  These  were  the  same  provinces 
in  which  Arthur  Young  met  with  small  proprietors  in  a  tol- 
erable condition.  If  a  peasant  in  this  part  of  the  country 
possessed  a  small  strip  of  land  uear  his  cottage,  large  enough 
to  grow  some  vegetables,  food  for  a  goat,  or  a  few  vines,  he 
earned  sufficient  to  supply  the  rest  of  his  wants,  in  day 
wages,  from  the  farmers,  or,  as  a  weaver,  from  the  neighbor- 
ing manufacturers. 

His  was  a  condition  similar  to  the  normal  one  of  the  peas- 
ant proprietors  in  France  at  the  present  day;  who  are  not 
reduced  farmers,  but  laborers  who  have  invested  their  sav- 
ings in  land.^  It  was  more  difficult  for  these  people  to  make 
a  livelihood  at  that  time  than  now,  because  there  were  fewer 
manufacturers  and  wealthy  agriculturists.  Except  in  the 
above-mentioned  j  rovinces,  these  petty  proprietors  were 
equally  wretched  ai.J  hopeless  with  the  m4tayer8  by  whom 
they  were  surrounded;  their  only  object  was  to  rent  a 
mStairie  in  addition  to  their  own  pittance  of  land.  They 
were  in  fact  entirely  lost  sight  of  among  the  mStayers ;  and 
this  is  the  reason  that  French  writers,  in  their  descriptions 
of  the  so-called  petite  culture  (plot  farming),  never  make  any 
special  mention  of  them,  but  always  confound  them  with  the 

>  Rossi,  1.  c. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


63 


more  numerous  class  by  which  they  were  surrounded.  All 
authorities  are  agreed  in  estimating  the  amount  of  land  culti- 
vated in  small  parcels  at  27,000,000  hectares,  while  only 
9,000,000  were  held  at  a  money  rent.  The  former,  there- 
fore, was  nearly  equally  divided  between  the  small  owners 
and  the  mStayers,  who  paid  their  rent  in  kind. 

In  France,  at  the  present  day,  nearly  23,000,000  hectares 
are  cultivated  by  small  proprietors  and  m4tayers ;  about 
8,000,000  ^  (the  same  as  in  1780)  by  tenants  paying  a  money 
rent;  and  rather  more  than  nine  and  a  half  millions  by 
wealthy  landlords.  ^  Hence  we  can  clearly  see  what  the 
French  Revolution  has  done  for  French  agriculture.  Not 
only  did  it  create  the  middle  class  of  land-owners,  but 
greatly  promoted  a  more  rational  system  of  tillage.  About 
four  million  hectares  have  been  rescued  from  the  petite  cul- 
ture^ and  an  equal  number  redeemed  from  utter  barrenness. 
The  breadth  of  land  standing  at  a  money  rent  is  exactly  the 
same  as  before  the  Revolution.  The  increase  is  entirely  in 
the  properties  of  rich  or  substantial  land-owners,  who  man- 
age their  own  estates,  —  which  indicates  a  change  to  more 
zealous  industry,  coupled  with  the  employment  of  greater 
capital.  The  extent  occupied  by  the  mStayers  is  still  very 
great,  and  the  condition  of  those  who  are  subject  to  it  but 
little  improved,  notwithstanding  the  abolition  of  socage  and 
seigniorial  rights.  It  will  be  one  of  our  most  important 
tasks  to  examine  the  several  events  and  tendencies  of 
the  Revolution  in  relation  to  their  effects  on  the  rural 
population. 

If  we  turn  our  attention  to  the  towns  of  ancient  France  we 
find  that  similar  causes  produced  effects  corresponding  to 
those  we  have  just  described.  The  civic  offices,  to  which 
persons  had  formerly  been  elected  by  the  districts  or  the 
guilds,  had  been  frequently  filled  up  by  the  crown  in  the 
seventeenth  century ;  and  in  the  eighteenth,  the  groat  major- 
ity of  them  were  sold  in  hereditary  possession  to  fill  the  ex- 

'  Quosnai,  Turcot,  Young. 

'  On  this  point  LulUnde,  Chateauvienx,  and  Cochut  are  in  t)ie  main  agreed. 
Lavergne's  figures  are  somewliat  different,  but  the  general  result  is  the  same. 


^  ■  it 


64 


ECONOMIC  HISTORY. 


chequer.^  The  government  of  the  towns,  therefore,  was  in 
the  hands  of  a  close  corporation  consisting  of  a  few  families, 
who,  generally  speaking,  allowed  themselves  to  be  infected 
with  the  indolent  and  self-seeking  spirit  of  the  central  gov- 
ernment. Associated  with  these  were  the  families  of  the 
moneyed  aristocracy,  the  members  of  the  great  financial 
companies,  the  farmers  of  the  indirect,  and  the  collectors  ol 
the  direct,  taxes,  the  shareholders  of  the  trading  monopolies, 
and  the  great  bankers.  These  circles,  too,  were  either  le- 
gally or  virtually  closed  to  the  general  world.  The  houne 
was  ruled  by  an  aristocracy,  to  which  only  birth,  or  the  per- 
mission of  government,  could  give  access.  Their  activity 
was  of  course  necessarily  centred  in  Paris.  Indeed,  tlicy 
stamped  their  own  character  on  this  city  to  a  degree  which 
would  be  impossible  in  our  age,  notorious  though  it  be  as 
the  epoch  of  the  rule  of  paper.  Every  one  knows  to  what 
a  dizzy  and  ruinous  height  stock-jobbing  was  carried  by  Law 
in  the  beginning  of  the  century ;  and  from  that  time  forward 
its  operations  were  never  suspended,  and  all  who  had  v/ealth 
or  credit  engaged  in  it  with  reckless  greediness.  Kings, 
nobles,  ministers,  clergy,  and  parliaments,  one  and  all,  took 
part  in  these  transactions;  and  the  chronic  deficit,  and  in- 
creasing debts,  of  the  treasury  afforded  constant  opportuni- 
ties of  involving  the  State,  and  making  a  profit  out  of  its 
embarrassments.  We  may  confidently  assert  that,  as  com- 
pared with  the  present  day,  the  speculative  swindling  of  that 
age  was  as  prevalent  and  as  shameless  as  its  immorality. 
Paris  was  not  at  that  time  a  manufacturing  town,  and  its 
wholesale  trade  was  insignificant;  with  few  exceptions, 
therefore,  the  industry  of  the  city  consisted  in  retail  trade 
and  the  negotiation  of  bills  of  exchange.  It  is  not  the  least 
characteristic  feature  of  the  indolent  and  selfish  licentious- 
ness into  which  the  higher  classes  of  a  great  nation  had 
fallen,  that  of  all  securities,  life  annuities  were  most  in 
favor;  by  means  of  which  the  purchaser  procured  high  inter- 
est for  himself,  while  he  robbed  his  children  of  the  capital. 

<  Depping,  "  Correspondance  administrative  de  Louis  XIV.,"  vol.  ii.,  Intro- 
duction. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


65 


The  trade  and  commerce  of  the  whole  empire  was  fettered 
by  the  restrictions  of  guilds  and  corporations.     The  prinei- 
iilcs  on  which  they  were  conducted  dated  from  Henry  111., 
who  was  the  first  to  promulgate  the  proposition  that  the  king 
alone  can  «!;rant  the  right  to  labor,  — a  maxim  which  con- 
tains the  wliole  doctrine  of  the  socialists  from  a  monarchical 
|)oint  of  view.     The  masters  of  every  handicraft  managed 
its  internal  affairs,  allowed  no  one  to  practise  it  who  did 
not  Itelong  to  their  guild,   and  admitted  no  one   to   their 
privilojios  until  he  had  passed  an  examination  of  his  quali- 
fication  Id-fore   themselves.     Originally  many   trades  were 
free  from  this  organization,  until  these  too  were  injuriously 
affected  by  the  fmancial  necessities  of  the  State,  —  when  the 
exclusive  rights  of  a  guild  were  sold  to  the  artisans,  as  their 
offices  were  to  the  judges.     The  government  soon  further 
proceeded  to  divide  each  trade  into  several  guilds,  and  made 
an  exclusive  corporation  of  the  most  insignificant  occupa- 
tion.    Thus  the  workers  in  ebony  were  distinguished  from 
the  carpenters,  the  sellers  of  old  clothes  from  the  tailors, 
and  the  pastry-cooks  from  the  bakers.     The  fruit-women  and 
flower-girls  formed  separate  exclusive  associations,  regulated 
by  formal  and  binding  statutes.     In  the  guilds  of  the  seam- 
stresses, embroiderers,    and   dress-makers,   only  men   were 
admitted  to  the  privileges  of  masters.     A  number  of  these 
statutes,  by  imposing  excessive  fees  and  duties,  rendered  it 
I  doubly  difficult  for  an  apprentice,  however  capable,  to  obtain 
the  rank  of  master.     Other  enactments  only   admitted  the 
sms  of  masters,  or  the  second  husbands  of  the  widows  of 
Imasters,  to  the  privileges  of  the  guild.     In  short,  the  power 
lof  the  .State  was  abused  in  the  most  glaring  manner  for  the 
jfurtherance  of  exclusive  class  interests.     Those  who  did  not 
llelong  to  this  aristocracy  of  trade,  could  only  support  them- 
Isolves  by  the  labor  of  their  hands,  in  a  state  of  eternal  servi- 
tude.     Despair  and   famine  drove  the  peasants   from   the 
country  into  the  towns,  where  they  found  no  employment 
3pen  to  them  but  that  of  day-laborers.     The  important  influ- 
Bnce  which  this  system  exercised  over  the  State  was  clearly 
anderstood,  both  by  the  privileged  and  the  excluded  classes. 

6 


66 


ECONOMIC  HISTORY. 


When  Turgot  abolished  the  guilds  in  1776,  the  parliament  of 
Paris,  the  princes,  peers,  and  doctors,  unanimously  declared 
that  all  Frenchmen  were  divided  into  close  corporations,  the 
links  of  a  mighty  chain  extending  from  the  throne  to  the 
meanest  handicraft ;  and  that  this  concatenation  was  indis- 
pensable to  the  existence  of  the  State  and  of  social  order.  It 
was  not  long  before  the  guilds  were  re-established  in  accord- 
ance with  this  declaration ;  we  shall  see  how  the  journeymen 
and  apprentices  replied  to  this  unctuous  manifesto  some 
fifteen  years  later. 

The   great  manufacturing  interests  of  the   country  were 
confined  by  the  same  narrow  restrictions.     Since  the  time  of 
Colbert,  who  was  the  real  creator  of  them,  manufactures  had 
been  the  darling  child  of  the  government;  and,  as  is  usually 
the  case  with  darling  children,  had  been  petted  and  tyran- 
nized over  at  the  same  time.     When  Colbert  began  his  oper- 
ations France  produced  neither  the  finer  kinds  of  cloth  nor 
stockings,    neither  silks  nor   glass,    neither  tar  nor  soap, 
The  previously  existing  handicraft,  which  had  been  for  a 
century  in  the  fetters  of  the  guild,  had  done  so  little  to  de- 
velop the  native  manufacturing  talent  of  the  country  that  the 
minister  was  obliged  to  introduce  German,   Swedish,  and 
Italian  workmen.     To  secure  a  sale  in  foreign  countries  he 
prescribed  with  great  exactness  the  sort  of  fabric  which  he 
wished  to  be  produced;  and  to  prevent   competition  from 
without,  he  enacted  a  number  of  prohibitory  and  protective 
duties.     Here,  again,  the  power  of  the  State  intruded  itself 
into  the  sphere  of  private  business,  to  the  advantage  of  the 
manufacturer  and  the  injury  of  the  consumer.     The  same 
system  was   continued   by  his  successors  with   still   worse 
effects,  because  it  was  carried  out  with  all  the  fickleness  and 
irregularity  of  Louis  XV. 's  government.      It  is  true  that 
manufacturers   made    great   progress,    and   increased  their 
annual  products  six-fold  from  the  time  of  Colbert  to  that  of  j 
Necker.  *     But  the  statutes  became  more  oppressive  everj 
year;  every  new  invention  and  improvement  was  excluded 
by  them;  and  after  1760  no  legislation  could  keep  pace  withj 

>  This  was  the  proportion  in  the  woollen  manufacture. 


■•til 

t  'I 


CAUSES  OF  THE   FRENCH  REVOLUTION. 


67 


the  progress  of  machinery.     Manufacturers,  therefore,  as  is 
pvorywhere  the  case  under  such  circumstances,   no  longer 
adafttt'd  themselves  to  the  natural  wants  and  capacities  of 
men,   but  immediately  took  an  artificial   and  aristocratic 
(liirction.     During   Colbert's    ministry,   while  only  60,400 
liaiids  were  employed  in  the  manufacture  of  wool,  no  less 
than  17,300  wore  engaged  in  lace-making;  and  a  himdred 
years  later,  while  the  manufacture  of  soap  only  produced 
18,000,000  of  francs  a  year,  that  of  hair-powder  was  esti- 
inatcil  at  not  less  than  24,000,000.     The  contrast  between 
the  aristocratic   luxury  of   the  rich  and   the   uncleanly  in- 
diirenco  of    the    populace   can  hardly   be    more   glaringly 
displayed.     Agriculture  experienced  in  every  way  the  dis- 
advantages of  a  system  which  crippled  communication  with 
foreign  fountrics,  raised  the  price  of  farming  implements, 
and  injuriously  affected  the  home  trade.     In  their  eagerness 
to  protect  manufactures  the  government  had  learned  to  look 
on  the  interests  of  agriculture  as  of  secondary  importance. 
They  accustomed  themselves,   like  the  modern  socialists,  to 
apply  the  word    people   exclusively   to  the   manufacturing 
classes  in  the  towns;  and  though  they  sacrificed  the  interests 
(»f  the  latter  in  a  thousand  ways  to  the  privileged  monopolist, 
yet  philanthropy  and  love  of  quiet  co-operated  in  inducing 
them  to  supply  the  necessities  of  the  poorer  artisans,  at  the 
cost  of  the  agricultural  population.     As  supplements  to  the 
protective  and  prohibitory  duties  in  favor  of  manufactures, 
decrees  were  issued  forbidding  the  exportation  of  corn  and 
other  raw  agricultural  products.     By  these  artifices  the  price 
of  the  hectolitre  of  wheat,  which  on  the  average  is  at  present 
nineteen  to  twenty  francs,  was  in  1764  forced  down  to  less 
than  eight  francs.*     Choiseul  then  opened  the  trade,  and  the 
price  rose  to  more  than   fifteen  francs.     A  similar  result 
followed  the  same  measure  in  1775,  during  the  ministry  of 
Tiirgot;  but  a  return  to  protection  reduced  the  price  once 
more  to  twelve  and  three  fourths  francs,  until  the  Revolu- 
tion.    The  city  artisans   had   tolerably  cheap   bread,    but 
nowhere  in  the  kingdom  were  the  farmers  prosperous.     In 

'  Melier,  in  vol,  x.  of  the  "  Mc'moires  de  1' Academic  royale  de  M^decine." 


68 


ECONOMIC  HISTORY. 


spite  of  the  most  violent  complaints  from  all  the  provinces, 
the  cause  of  the  evil,  and  consequently  the  evil  itself,  re- 
mained unchanged.  The  government  adhered  to  the  convic- 
tion that  it  was  their  immediate  duty  to  provide  for  the 
maintenance  of  the  population  of  the  towns.  It  sccuu d  to 
them  a  matter  of  course  that  the  Stat(!  should  use  its  political 
power  for  the  advantage  of  its  rulers  and  their  favorites. 
No  one  considered  the  remoter  consequences  of  such  a  jnin- 
ciple;  no  one  asked  the  (juestion,  "  What  if  this  power  shuuld 
fall  into  democratic  hands  ?  " 

Ii(!t  us  endeavor  to  obttiin  a  general  view  of  the  ■wealth  of 
Fninc((  at  this  period.  From  the  imperfection  of  onicial 
information  the  task  is  a  difTicult  one,  and  its  results  uiuer- 
tain.  Even  an  ajjproximation  to  the  truth,  however,  will  nut 
be  without  interest,  since,  in  order  not  to  bring  forward  \\\\- 
meaninjr  figures,  we  shall  constantly  institute  a  comjiarisun 
with  the  now  existing  state  of  things. 

The  well-informed  Tolosan,  the  only  authority  on  this  sub- 
ject, estimates  the  total  produce  of  manufactures  at  nin<'  liiiii- 
dred  and  thirty-one  million  francs  ;  that  of  handicraft  nt 
sixty  millions.  At  the  present  day  ^  the  manufactures  of 
Eastern  France  alone,  not  reckoning  handicraft,  produce 
2,282  millions;  the  sum  total  therefore  has  been  at  least 
quadruitled.  At  the  former  jjeriod  it  amounted  to  tliiitv- 
nine  francs  per  head  of  the  whole  population;  at  present  we 
might  unhesitatingly  place  it  at  more  than  one  hundred  per 
head.  The  emancijiation  of  the  internal  trade  since  178!'  has 
not  raised  the  amount  of  property  produced,  but  —  what  has 
so  often  been  called  in  question  —  has  favoralily  infhienepd 
the  manner  in  which  it  is  distributed.  The  daily  wages  of  llie 
manufacturing  laborers  in  1788,  according  to  a  rather  lii;ili 
estimate,  were  for  men  twenty-six  sous,  and  for  women  fif- 
teen.'-^  They  t've  now,  according  to  the  most  numerous  and 
trustworthy  o' -i  ivjiion.  foi-ty-two  sous  for  men,  and  twenty- 
six  for  W(mieii.     Tlie  d  'ily  wages  of  the  agricultural  laborers, 


1  In  1853.     In   I'^'iOa  totnl  of  five  milliards  was  reached, 
de  la  FraiK'c  en  ITH'.t. '  pr.  WKJ. 

2  Boiteau  thiuks  hi  to  20  sous. 


Boitcati, 


■i;t«t 


f 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


69 


ton,  can  certainly  not  be  reckoned   at  more    than  fifteen 
sous*  for  the  year  1789,  or  less  than  twenty-live''  in  the 
|;;< .sent  (lay.     It  wo  further  take  into  account  the  very  con- 
siderable increase  in  the  number  of  workinjjf  days,  arising 
fntin  the  abolition  of  thirty  holidays,  we  shall  find  the  annual 
w;i'_T8  of  the  earlier  period  to  be  little  more  than  half  what 
tlicy  now  arc,  namely,  three  hundred  and  fifty-one  francs  for 
the  manufacturing,  and  one  hundred  and  fifty -seven  for  the 
au'ricultural  laborer,  against  six  hundred  and  thirty,  and  three 
liimdred  at  the  present  day.     lo  appreciate  the  significance 
of  those  results  we  must  compare  the  prices  of  provisions  at 
these  two  periods.     It  appears,  then,  that  before  1789  bread 
was  cdusidcrod  very  cheap  at  three  sous  per  pound,  and  it 
was  only  in  Paris  that  this  rate  was  a  common  one;  in  the 
jiroviiK'ea  the  price  was  generally  higher.     In  our  own  times 
the  average  price  for  the  whole  of  France  from  1820  to  1840 
was  seventeen  centimes,  while  at  Paris,  in  18-51,  it  was  four- 
teen cents,  —  less,  therefore,  than  the  old  rate  of  three  sous. 
Tliis  seems  out  of  proportion  to  the  price  of  corn,  since  the 
hrctoUtre  of  wheat   in   1780  cost  from    twelve   to  thirteen 
fiaiKs,  and  in  1840  from  nineteen  to  twenty.     This  apparent 
InconL^ruity,  however,  is  accounted  for  by  the  improvement 
in  the  method  of  grinding  and  baking,  by  which  a  third,  or 
even  a  half,  more  weight  of  bread  is  now  obtained  from  the 
same  (juantity  of  corn  than  in  the  former  period. ^     We  find, 
theref(^ie,  that  the  laborer  received  for  his  wages  little  more 
than  half  the  quantity  of  bread  which  the  modern  workman 
cai  olitain  for  what  he  earns.     The  same  proportion  holds 
good  ill  other  kinds  of  food,  and  in  regard  to  clothing  the 
coin|)aiison  is  still  more  unfavorable  to  the  ante-revolutionary 
period. 

Wo  shall  discover  the  determinate  cause  of  these  differ- 
ences when  we  come  to  consider  the  main  wealth  of  the 
French  empire, —  the  produce  of  the  soil  in  the  widest  sense 

^  Lavergne  says  30  sous  (p  67). 

-  Bi'fore  1789  the  septier  (240  pounds)  of  wlieat  yielded  only  180  pounds  of 
bread. _.Uo,„Ve„r,  12  July,  1792,  supplement. 
'  Young,  "  Assemblc'e  Nationale,"  15th  Jan.,  1700,  11th  Aug.,  1791. 


70 


ECONOMIC  HISTORY. 


of  the  word.  It  would  carry  ua  too  far  if  we  wore  to  examine 
every  branch  of  the  subject,  and  discuss  all  the  difficulties 
connected  with  it;  it  will  be  sufficient  to  dwell  on  a  few  of 
the  principal  points  of  interest.  Of  wheat,  the  great  Htai! 
of  life,  the  soil  of  France  produced  before  the  llevolutiou 
about  40,000,000  hectolitres,  or  one  hundred  and  sixty-seven 
litreH  per  head  of  the  population;  and  in  1840,  70,000,000,  or 
two  hundred  and  eight  litres  per  head.  At  the  former  period 
the  number  of  cattle  was  calculated  at  353,000,000  head,  aiul 
at  the  present  day  at  49,000,000;  and  there  is  an  equal  in- 
crease in  the  number  of  the  other  domestic  animals.  Tlio 
vineyards  formerly  yielded  27,000,000  hectolitres,  and  nt 
present  37,000,000,  so  that  the  proportion  per  head  is  at  any 
rate  not  lower  than  it  was. '  And  if  we  take  into  considera- 
tion that  a  number  of  useful  agricultural  products  were  at 
that  time  unknown,  that  a  violent  controversy  was  carried 
on  about  the  wholesomeness  of  potatoes,  that  the  forests 
were  allowed  to  run  to  waste  far  more  than  at  the  pn'riont 
day,^  we  shall  not  be  astonished  that  the  best  statist  of 
modern  France  estimates  the  vegetable  product  of  the  French 
soil  (which  now  exceeds  in  value  the  sum  of  6,000  millions) 
at  not  more  than  2,000  millions  at  the  period  before  the  Revo- 
lution.'' The  importance  of  this  fact  is  sufficiently  evident; 
and  wc  may  gain  an  idea  of  the  state  of  the  population  before 
1789  by  remembering  that  even  now  the  total  consuni|)tion 
of  food  in  Franco  is  not  greater  in  proportion  to  the  popula- 
tion than  in  Prussia,  and  much  less  than  in  England.* 

Respecting  commerce,  the  third  great  branch  of  national 
wealth,  I  have  but  little  to  say.  I  am  not  aware  that  am 
statistical  data  exist  of  the  internal  traffic  of  France  before 

*  Moreau  de  Yonnbs,  from  contemporary  sources.  I  have  followed  liim 
because  space  does  not  allow  me  to  give  my  reasons  for  tliinking  a  much  more 
unfavorable  state  of  things  in  1770  highly  probable. 

*  "  Me'moire  remis  aux  Notables,  1781 ; "  Young's  "  Travels,"  2d  ed.  vol.  ii 
p.  IOC ;  Moreau,  "  Agriculture,"  306. 

*  The  calculation  of  Young  agrees  with  this.  Tolosan,  Dedeley  d'Agitf. 
Lavoisier,  make  amounts  higher.  (Boiteau,  "fitat  de  la  France  en  1780," 
p.  481,  compares  their  statements.)  But  the  uncertainty  of  their  calculation! 
is  very  perceptible. 

*  Communications  from  the  Prussian  Statistical  Bureaus,  1861. 


CAU^iES  OF  THE  Fit  EM' II  HE  VOLUTION. 


71 


the  Revolution ;  it  was,  no  doubt,  smaller  than  at  the  pres- 
oiit  (lav,  ill  consequence  of  the  multitude  of  inland  duties. 
And  with  regard  to  the  foreign  commerce  of  the  earlier 
period,  we  have  no  means  of  dividing  the  sum  totals  which 
lie  before  us  into  the  value  of  the  raw  materials  and  the  cost 
of  manufacture,  on  the  one  hand,  and  the  clear  profits  of 
trade,  on  the  other.  It  must  suffice  us  to  gain  a  general  idea 
of  the  relation  between  the  two  periods  from  the  sunmiary 
rttatomcnt  that  in  the  custom-house  registers  innnediately 
l)('f(ire  til?  Revolution  the  annual  imports  are  stated  at 
')7t), 000,000,  and  the  exports  at  540,000,000,  while  as  early 
as  1836  the  former  amounted  to  905,000,000,  and  the  latter 
to  1)01,000,000,  and  in  1857  both  imports  and  exports  had 
risen  to  a  value  of  more  than  1,800,000,000.  Taliing  all  in 
all,  tlicreforc,  France  under  the  old  monarchy  was  f(jur  times 
as  poor  in  manufactures,  three  times  as  poor  in  agriculture, 
and  more  than  three  times  as  poor  in  commerce,  as  it  is  in 
the  present  day.  We  must  bear  this  result  well  in  mind 
when  we  try  to  form  a  judgment  respecting  the  finances  of 
the  ancien  rSgime,  A  budget  of  six  hundred  millions 
weighed  as  heavily  upon  the  resources  of  the  country  at  that 
period  as  a  budget  of  1,800,000,000  would  now,  and  conse- 
quently a  deficit  of  100,000,000  was  equivalent  to  one  of 
300,000,000  in  our  own  times.  Such  a  deficit  actually 
existed  when  Louis  XVI.  mounted  the  throne.  It  is  there- 
fore easy  to  conceive  that  his  attention  should  be  strongly 
turned  to  the  restoration  of  the  balance  between  income  and 
expenditure,  and  that  his  vain  endeavors  in  this  direction 
shijuld  shake  the  fabric  of  the  State  to  its  very  foundation. 

A  whole  volume  would  be  necessary  to  detail  the  different 
schcin""  nf  reform  which  were  brought  forward  between  the 
accession  of  Louis  XVI.  and  the  outbreak  of  the  Revolution. 
It  will  Ite  sufficient  for  our  purpose  to  notice  the  chief  points, 
which  have  an  important  bearing  on  the  antecedents  and  the 
actual  events  of  that  mighty  movement. 

Louis  XVI.  himself,  as  no  one  can  doubt  who  has  ap- 
proached the  sources  of  the  history  of  this  period,  entered 
on  the  task  of  government  with  a  heart  full  of  piety,  philan- 


>  \ 


if 

■k 


72 


ECONOMIC  HISTORY. 


thropy,  and  public  spirit.  He  waa  earnest  and  pure-minded, 
penetrated  by  a  sense  of  his  own  dig-nity  and  the  responsi- 
bilities attached  to  it;  and  firroly  resolved  to  close  forever 
the  infamous  paths  in  which  hii  predecessor  had  walked. 

But  unhappily,  his  capacity  bore  no  proportion  to  his  good- 
will. He  was  incapable  of  forming  a  decision ;  his  education 
was  delicicnt;  he  was  awkward  both  in  person  and  speech, 
and  slow  of  comijrehension.  As  he  had  a  very  limited  knowl- 
edge both  of  the  people  and  the  condition  of  his  empire, 
the  selection  of  his  ministers  was,  from  the  very  outset,  de- 
termined by  accident,  the  influence  of  his  aunts,  his  queen, 
or  the  contending  court  factions;  and  as  he  was  immovable 
wherever  moi-ality  was  concerned,  but  utterly  helpless  in  the 
practical  execution  of  his  ideas,  his  was  just  a  case  in  wliich 
almost  everything  depended  on  the  aid  of  his  nearest  ad- 
visers. He  possessed  just  sufficient  sense  of  justice  and 
benevolence  to  encourage  every  effort  for  useful  i-eforms,  but 
lacked  entirely  that  firmness  of  an  enlightened  judgment 
which  knows  how  to  bring  about  a  positive  result  in  spite  of 
the  opposition  of  existing  interests.  Tho  inevitable  conse- 
quences soon  showed  themselves.  Anarchy,  which  under 
Louis  XV.  had  reigned  in  the  minds  of  men,  now  broke 
forth  into  overt  acts.  The  sufferings  of  the  people,  which 
individuals  had  hitherto  borne  in  silent  apathy,  now  occupied 
the  attention  of  the  masses. 

The  same  chance  which  in  his  reign  directed  the  manage- 
ment of  public  business  had  given  him,  as  his  first  minister, 
Turgot,  the  greatest  reformer  of  the  day. 

This  great  minister's  strokes  fell  heavily  on  the  existini' 
system  in  every  direction.  Among  his  measures  we  fiml  tieu 
trade  in  corn,  abolition  of  the  corvSe  in  the  country  districts. 
liberation  of  trade  from  the  trammels  of  the  guilds,  the  erec- 
tion of  the  eaixse  d^escompte,^  a  number  of  improvements  and 
alleviations  in  the  mode  of  raising  the  public  taxes,  and  a 
prospect  held  out  to  all  possessors  of  property,  of  a  gradual 
increasing  share  in  political  rights;    and  it  is  under  these 

*  An  institution  for  lending  money  for  the  furtlicrance  of  manufactures  anJ 
commerce. 


CAUSES  OF  THE   FRENCH  REVOLUTION. 


73 


heads  tliat  the  restless  activity  of  this  liheral  statesman  may 
be  best  arranged.  We  may  easily  conceive  that  there  was 
scarci'lv  one  of  the  privileged  classes  which  did  not  consider 
its  pnivioiis  existence  imperilled. 

Opposition  rose  in  every  quarter;  the  courtiers,  the  parlia- 
mi'iiis,  tlu'  landed  aristocracy,  and  the  members  of  the  guilds 
all  threw  themselves  into  an  attitude  of  defence  with  noisy 
zeal.  The  contest  penetrated  into  the  royal  family  itself, — 
Liiiiis's  younger  brother,  Count  Charles  of  Artois,  abused 
the  minister,  who,  he  said,  was  undermining  the  aristocracy, 
the  prop  and  rampart  of  the  throne;  and  a  cousin  of  the  king, 
the  rieh  and  abandoned  Philip,  Duke  of  Orleans,  began, 
amid  the  general  excitement,  to  play  the  demagogue  on  his 
own  aecount.  Then  for  the  first  time  a  spectacle  was  seen 
in  Paris  which  was  subsequently  repeated  in  ever  darker 
colors,  —  the  spectacle  of  the  police  authorities  of  the  capital 
stirring  up  the  mol)  against  the  crown,  and  on  this  occasion 
in  the  interest  of  the  privileged  classes. 

At  lirst  Louis  XVI.  declared  that  he  and  Turgot  were  the 
only  trieuds  of  the  people,  and  stood  firm  against  the  parlia- 
ment of  Paris  and  the  street  rioters;  but  he  was  not  proof 
ajraiust  the  feebleness  of  his  own  character  and  the  wearing 
iuHiience  of  those  by  whom  he  was  daily  surrounded.  After 
an  administration  of  '.learly  a  year  and  a  half  Turgot  was 
obliged  to  yield  to  the  reaction  of  the  aneien  re;/ime,  and 
almost  all  his  creaticms  collapsed  at  once.  Then  followed  a 
kMVi  period  of  experiments  and  palliatives,  the  successors 
of  Turgot  would  gladly  have  gone  on  in  the  broad  track  of 
traditional  privileges  if  their  Increasing  financial  difBcnl- 
ties  had  left  them  any  peace.  It  was  just  at  this  time  that 
Louis  resolved  to  support  the  North  Americans  against  Eng- 
land, which  he  really  did  against  his  own  will  and  the  views 
of  his  ministers,  who  dreaded  the  expense  of  a  great  war,  and 
I  clearly  s;iw  that  the  emancipation  of  the  colonies  would  not 
jwoiiken  Kngland.  Hut  the  undefined  longing  for  freedom, 
I  and  the  lil)eral  political  doctrines  which  had  taken  root  far 
jand  wide  in  the  land  prevailed  over  the  scruples  of  the 
Uhig  and  his  emns  dlurs.     The  Marquis  of  Lafnyetto,  then  a 


74 


ECONOMIC  HISTORY. 


tall,  light-haired  youth,  full  of  vanity  and  ambition,  who,  on 
account  of  his  ungraceful  manners,  had  no  success  at  court, 
fitted  out  a  ship  at  his  own  expense  and  sailed  across  the 
Atlantic.     A  number  of  influential   persons   cried   out  for 
vengeance  upon  England  for  the  humiliation  sustained  in  the 
Seven  Years'   War;   in  a  word,   the  warliice  party  carried 
their  point,  and  war  was  declared  against  England.     The 
consequence  to  France  was  a  rapid   spread   of  democratic 
sentiments   on   the   American   pattern.       The    followers  of 
Rousseau  were  triumj)hant;  here,  they  said,  might  be  seentlie 
possibility  of  a  democracy  on  a  broad  basis,  —  the  construc- 
tion of  a  State  on  the  foundation  of  the  natural  rights  of 
man.     Another  consequence  of  the  war  was  to  throw  fresh 
burdens  on  the  public  exchequer.     The  minister  of  fnuince 
at  this  time  was  Necker,  a  native  of  Geneva.     Having  come 
to  Paris  as  a  poor  clerk,  he  had  risen  by  his  talents  and  skill 
in  business  to  the  positi«jn  of  a  rich  banker,  and  with  great 
self-coniplaceiicy  had  made  his  house  the  rendezvous  of  the 
more  distinguished   members  of  the  liberal  part''.     By  his 
influence  with  the  bourse  he  procured  a  certain  degree  of 
credit  for  the  State,  and  raised  loan  after  loan  to  the  amount 
of  five  hundred  millions,  without  any  increase  of  the  taxes, 
or  any   provision  for   a   liquidation   of   the   debt   incurred. 
This  was  evidently  sacrificing  the  future  to  the  present,  since 
the  deficit  became  larger  every  year,  as  the  interest  of  the 
public  debt  increased.     Necker  had  the  real  merit    :  bring- 
ing some  of  the  departments  of  finance  into  better  order;  he 
enjoyed  for  the  time  being  unboimded  popularity,  and  basked 
with  delight  in  the  universal  acknowledgment  that  he  was 
the  greatest  statesman   in   Europe.      Public  confidence  was  | 
freely  given  to  a  minister  who  endeavored  to  found  his  ad- 
ministration on  credit  alone,  —that  is,  on  the  confidoiiceof 
mankind.     He  was  looked   on  as   a  perfect  hero  when  h(\ 
introduced,    with   good    results,    provincial    assemblies  into 
Berry  and  Guienne,  and  soon  afterwards,  breaking  througli 
all  the  traditions  of  the  ancient  monarchy,  published  a  de| 
tailed,   but  unfortunately  very  inexact  and   highly  ooloreti 
report  on  the  state  of  the  finances.     But  as  he  nowhere  laiii 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


70 


the  axe  to  the  root  of  the  evil,  he  only  roused  a  number  of 
powerful  interests  by  his  attempts  at  innovation,  but  was 
utterly  unable  to  close  the  source  of  financial  confusion. 
Ho,  too,  soon  saw  no  other  means  of  recovery  but  limitation 
of  the  budget,  and  economy  in  the  expenses  of  the  court ;  by 
avowing  which  he  made  himself  hateful  to  all  the  grandees 
of  the  antechamber,  and  was  deprived  of  his  office  in  May, 
1781.  After  two  insignificant  and  inexperienced  ministers 
had  exhausted  their  strength  in  the  years  immediately 
following,  the  intendant  of  Lille,  the  gifted  but  frivolous 
Calonne,  was  called  to  the  helm.  He  began  with  the  propo- 
sition that  whoever  wished  for  credit  must  cultivate  luxury ; 
and  he  renewed  the  prodigality  of  the  court  in  the  style  of 
Louis  XV.  After  matters  bad  gone  on  in  this  jubilant 
course  for  some  years,  and  the  public  debt  had  been  increased 
by  four  hundred  millions,  and  the  taxation  by  twenty-one 
millions,  the  ruin  of  the  country  became  palpable  at  the  be- 
ginning of  the  year  1787,  and  the  catastrophe  inevitable. 

Let  us  here   cast  a  glance  at  the  budget  of  the  ancien 
r^lfime,  the  disorder  of  which  was  to  give  the  signal  of  con- 
vulsion  to  every   quarter   of    the   civilized   world.      After 
I    Xecker  and  Calonne,  the  Notables  and  the  Revolution,  have 
,    quarrollod   about   its   contents   with   equal   mendacity,    tiiis 
i    budjrot  now  lies  in  its  most  secret  details  before  the  eyes  of 
'    the  historical  inquirer.^ 

And  fust,  with  regard  to  the  national  income,  which,  as 
is  well  known,  amounted  to  about  five  hundred  millions  be- 
iDi'o  17S9,  nearly  eight  hundred  under  Napolecm,  and  then 
increased  during  the  period  between  1815  and  1848  to  1,500 
million  francs.  However  definite  these  figures  m.ay  appear, 
we  can  by  no  means  draw  a  conclusion  from  thorn  as  to  the 
chea|)ness  of  the  respective  modes  of  government  above- 
mentionf'd.  We  have  already  observed  that  in  proportion  to 
the  national  wealth  a  taxation  of  five  hundred  millions  be- 
fore 1789  would  be  about  equivalent  to  one  of  1,500  millions 
''>t  the  pn .  "nt  day.  In  the  next  place,  we  must  make  several 
additions  to  the  round  sum  of  five  hundred  millions. 

'  Bailly,  "  Hist,  finauc.  de  la  France,"  ii.  278. 


76 


ECONOMIC  HISTORY. 


The  income  of  the  State  in  the  year  1785  was  calculated 
at  five  hundred  and  fifty-eight  millions,  to  which  were  added 
forty-one  millions  more  for  the  local  administration  of  the 
provinces,  a  sum  which  was  never  paid  into  the  treasury,  but 
immediately  expended  in  the  different  places  where  it  was 
raised.  Thus  we  find  that  the  nation  was  bearing  an  anruial 
burden  of  from  five  hundred  and  ninety-nine  to  six  hundred 
millions.  At  the  same  time  the  Church,  whose  expenses  now 
figure  in  the  budget  of  the  State,  raised  one  hundred  and 
thirty-three  millions  in  tithes,  and  sixteen  millions  in  other 
dues  and  offerings.^  The  fees,  which  served  as  a  complement 
to  the  judicial  salaries,  amounted  to  twenty-nine  millions ;2 
the  seigniors  raised  about  2,500,000  in  tolls  of  various  kinds, 
and  at  least  37,000,000  in  stamp  duties. ^  I  pass  over  the 
feudal  rents  and  services,  the  valuation  of  which  is  quite 
impossible.  These,  from  their  very  nature,  cannot  be  tukeii 
into  account  in  speaking  of  the  public  burdens,  and  may  verv 
well  be  set  off  against  the  mortgage  debts  of  the  modern 
peasant  proprietors. 

The  items  already  mentioned,  however,  in  addition  to 
some  of  a  similar  character,  amounted  to  tv.'o  hundred  and 
eighty  millions,  so  that  the  French  people  had  at  that  period 
to  bear  a  total  annual  taxation  of  eight  hundred  and  eighty 
millions.  If  we  compare  this  sum  with  the  national  wealth. 
we  may  unhesitatingly  set  it  down  as  equivalent  to  n 
amount  of  2,400  millions  at  the  present  day;  it  follows, 
therefore,  that  from  the  time  of  Louis  XV,  to  that  of  Napo- 
leon 111.  there  existed  but  one  government  in  France  whicli 
appropriated  to  itself  a  stiT  larger  proportion  to  the  public 
income  than  the  anclen  ref/ime,  and  that  one  was  the  jrovern- 
ment  of  the  Jacobins  during  the  Reign  of  Terror.  The 
Empire,  the  Restoration,  and  Louis  Philippe  contented  them 


>  Louis  Blanc,  b    iii.  c.  3,  estimateB  them,  according  to  other  authorities. 
not  at  16,  but  at  ."0  millions. 

'  Accordintf  to  other  (Ktimates,  42  millionB.     Boiteau,  "  fetat  de  la  Frftnco  in 
1781."     raris.  1801. 

3  'For  the  sake  of  brevity  I  use  this  term  to  denote  all  the  fees  paid  on  change  | 
of  property,  e  <j.,  lods,  relods,  quints,  etc. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


77 


solves  with  far  smaller  sums;  here,  too,  feudalism  finds  its 
counterpiii't  among  the  socialists. 

When  wo  inquire  into  the  distribution  of  these  taxes 
amoni^  the  dillerent  classes  of  the  people,  we  discover  a  glar- 
iu"  inequality.  The  higher  ranks  were  not  indeed  exempt 
from  taxation,  but  they  were  in  many  respects  favored.  Of 
the  tuxes  on  consumption,  which  were  valued  at  three  hun- 
dred and  eight  millions,  they  bore  of  course  a  full  share;  but 
of  the  land  and  capitation  taxes  (one  hundred  and  seventy- 
one  millions)  they  ought,  as  was  discovered  during  the 
Revolution,  to  have  paid,  on  a  fair  distribution,  thirty-three 
millions  more  than  they  actually  did.  In  the  next  place 
the  niiiintenanco  of  the  })ublic  roads,  which  were  entirely 
kept  Mp  l)y  nior.us  of  the  corvee,  at  a  cost  of  twenty  millions, 
and  further,  the  expenses  of  the  provincial  militia,  about  six 
and  one  fourth  millions,  rested  entirely  on  the  shoulders  of 
the  lower  classes.  If  we  take  into  consideration  the  forty 
millions  qnotod  above,  )vhich  the  seigniors  received  from  the 
peasants,  the  fact  that  the  poorer  classes  of  every  town  were 
rosponsilde  for  the  taxes  of  their  commune,  even  when  their 
rich  fellow-citizens  escaped  payment  by  the  purchase  of 
[privileged  oilices,  and  lastly,  the  scandalous  unfairness  in 
the  imposition  of  the  taxes  on  consumption  to  which  the 
helpless  multitude  was  subjected  by  their  superiors,  Ave  shall 
easily  understand  the  triumphant  fury  with  which,  in  1789, 
the  |»eas:ints  more  especially  received  the  joyful  intelligence 
iof  the  utter  destruction  of  the  svstem  above  described. 

Great  as  was  the  proportion  which  it  exacted  of  the  national 
{income,  the  government  found  itself,  nevertheless,  in  a  state 
Iof  cver-inereasing  need  and  embarrassment.  Disorder  on  the 
lone  side  and  selfishness  on  the  other  scattered  its  treasures 
jto  the  wind.  The  case  was  the  same  in  the  financial  admin- 
istratidii  as  in  that  of  justice;  no  one  had  ever  tried  to  or- 
Ifrnnizc  [x  on  any  grand  principle  of  wise  adaptation  to  the 
lend  \\  view;  on  the  contrary,  a  number  of  isolated  jurisdic- 
Itions,  distinguished  from  one  another  according  to  provinces 
jorsoiu'ces  ui  incimie  or  the  destination  of  the  funds  in  qncs- 
Ition,  existed  side    by  side,    interfering    with   each   other's 


78 


ECONOMIC  HISTORY. 


operations  and  destroying  all  responsibility.     The  amount  of 
arrears  due  the  treasury,  equal  perhaps  to  half  the  annual 
budget,  not  even  the  Revolution  has  been  able  to  ascertain, 
and  it  could  only  get  hold  of  the  profits  of  the  farmers  of  the 
revenue  by  means  of  the  guillotine.     When  once  familiarized 
with  deficits  the  government  soon  fell   into  the  stream  of 
floating  debts.     The  anticipation  of  the  revenue  <>f  future 
years,  at  a  usurious  discount  paid  to  the  collectors  them- 
selves, the  putting  oif  the  payment  of  debts  which  had  fallen 
due,   and  the  omission  of  expenditure  prescribed  by  law, 
were  the  cause  of  equally  enormous  losses,  when  the  day  for 
liquidation  at   last    arrived.       How   widely  this   confusion 
spread  may  be  gathered  from  the  actual  cash  accounts  of  the 
year  1785.     By  the  side  of  the  regular  income  of  the  treas- 
ury,   of  not  quite  three  hundred  and   fifty-seven  millions. 
there  is  another  account  of  four  hundred  and  ninety-three 
millions   income  and  four  hundred  and  seven  millions  ex- 
penditure, consisting  of  items  which  belong  either    o  the 
earlier  or  later  years  of  the  period  between  1781  and  178"; 
80  that  the  sum  total  amounts  to  nearly  eight  hundred  and 
fifty  millions.     We  see  what  a  field  was  opened  to  specula- 
tors and  the  lovers  of  plunder,  and  to  what  a  state  such  pro- 
ceedings had  reduced  the  prosperity  of  an  empire  which,  a 
hundred   years  earlier  and  twenty  years  later,  dictated  its 
will  to  Europe  as  a  law. 

The  last  feature  in  this  State  economy  which  reveals  to  us 
its  character  is  the  kind  of  expenditure  in  which  these  treas- 
ures collected  with  so  much  difficulty  were  employed.  The 
expenses  of  the  court  were  stated  in  the  official  budget  at 
thirty-three  or  thirty-five  millions,  but  they  were  in  reality 
forty  millions,  which  did  not  include  the  royal  hunting  ex- 
peditions and  journeys,  the  salaries  of  the  great  officers  of 
the  court,  or  the  maintenance  of  the  royal  palaces.  The  war 
office,  the  cost  of  which  Necker  states  at  ninety-nine  millions 
and  Calonne  at  one  hundred  and  fourteen  millions,  received 
one  hundred  and  thirty-one  millions,  of  which  rather  more 
than  thirty -nine  millions  went  to  the  administration,  forty- j 
four  millions  for  the  pay  and  commissariat  of  the  troops. 
and  forty-six  millions  for  the  salaries  of  the  officers. 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


79 


Entirely  removed  from  all  ministerial  calculation  were  the 
money  orders  of  the  king  himself  "for  presents,  etc.,  to 
courtiers,  to  the  minister  of  finance  and  magistrates ;  repay- 
ment of  foreign  loans ;  interest  and  discount  to  the  treasury 
officials ;  remission  of  certain  personal  taxes,  and  unforeseen 
expenses  of  every  kind."  This  class  of  expenditure,  which  is 
well  characterized  hy  the  above  heading,  amounted  in  1785 
to  one  hundred  and  thirty-six  millions;  in  other  years  the 
sum  was  rather  smaller;  but  we  may  fairly  assume  that  the 
nnnuul  average  was  more  than  one  hundred  millions.^  And 
while  we  thus  see  nothing  but  abundance  and  superfluity 
among  the  highest  classes  of  society,  the  bridges  and  roads 
are  only  set  down  at  four  millions;  the  public  buildings  at 
scarcely  two  millions,  and  the  scientific  institutions  at 
rather  more  than  one  million ;  for  which  objects  the  budget 
of  1832  and  the  following  years  granted  fifty-nine  millions'. 
The  hospitals  and  foundling  institutions  received  six  millions 
from  the  State,  six  from  the  Church,  and  had  a  revenue  of 
twenty-four  millions  of  their  own;  while  the  benevolent  in- 
stitutions of  modern  France  (1832)  had  an  annual  sum  of  one 
hundred  and  nineteen  millions  at  their  disposal.  In  short, 
whatever  portion  of  the  financial  affairs  of  this  feudal  state 
we  investigate,  we  arrive  at  the  same  result,  and  find  the 
people  separated  into  two  great  classes,  one  of  which  was 
enriched  at  the  cost  of  the  other. 

But  as  every  such  draining  of  the  wealth  of  a  nation  bears 
within  itself  the  germs  of  ruin,  by  drying  up  on  the  (me 
hand  the  sources  of  income,  and  increasing  on  the  other  the 
passion  for  extravagance,  the  government  found  itself  at  the 
end  of  1786  in  the  following  condition:  the  regular  annual 
income  was  three  hundred  and  twenty-seven  millions;  the 
annual  expenditure  according  to  the  treasury  accounts 
amounted  to  three  hundred  and  forty  millions;  in  addition 
to  th.s  there  were  twenty-seven  millions  for  pensions  and 
seventy-two  millions  of  urgent  arrears  from  former  years; 

'  ^Ve  arrive  at  this  result  from  tlie  debates  of  the  "  Assemblo'e  Constitu- 
»nte"  (in  April,  1790)  on  the  pensions,  the  ordonnances  a  romptnnt,  and  the  litre 
mije.   Louis  Blanc  gives  a  number  of  details  from  tlicpc  in  b  iv.,  c.  5. 


80 


ECONOMIC  mSTOllY. 


and  laf '\-,  in  the  year  1787  there  was  a  loss  of  twenty-one 
millions  from  the  cessation  of  a  tax  which  had  only  been 
imposed  for  a  period  endinfj;  with  that  year.  The  delicit, 
therefore,  amounted  to  one  hundred  and  ninety-eight  mil- 
lions. Up  to  this  time  the  government  had  helped  itself  by 
all  the  artifices,  both  bad  and  good,  of  a  credit  strained  to  the 
very  utmost  and  now  utterly  exhausted.  An  increase  of  the 
taxes  was  not  to  be  thought  of  on  account  of  the  enormous 
burdens  by  which  the  nation  was  already  crushed.  Under 
these  circumstances  Calonne,  with  genial  frivolity,  recurred 
to  the  seiious  and  noble  plans  of  Turgot. 

lie  had  hitherto  lived  on  the  favor  of  the  priviloircd 
classes;  he  now  endeavored  by  sacrificing  them  to  relieve 
the  commonwealth.  He  congratulated  the  State  on  having 
within  it  so  many  great  abuses,  by  the  removal  of  which  now 
sources  of  prosperity  might  be  opened. 

The  opposition  which  Turgot  had  met  with  was  of  course 
directed  with  redoubled  fury  against  Calonne.  A  closely 
crowded  throng  of  privileges  rose  tumultuously  against  his 
plans.  The  court  nobility,  the  provincial  estates,  the  tax- 
collectors,  the  courts  of  law,  the  police  officers,  the  council- 
lors of  the  commune,  and  the  heads  of  the  guilds,  took  up 
the  contest  against  the  will  of  the  king  and  his  ministers. 
But  the  development  of  modern  ideas  had  made  such  progress 
that  the  parties  competed  with  one  another  for  the  power  of 
public  opinion.  The  ministry  itself  emancipated  the  press 
in  order  to  expose  the  advocates  of  the  old  system  to  the  na- 
tional contempt.  The  young  nobles  of  the  court  and  in  the 
provinces  armed  the  mob  of  Paris  and  the  peasants  of 
Auvergne  against  the  ministers,  and  instigated  them  to  vio- 
lent excesses.  An  assembly  of  aristocratic  notables,  to 
whom  Calonne  submitted  his  schemes  of  reform,  refused 
their  assent,  claimed  the  right  of  inspecting  and  superin- 
tending every  department  of  the  public  service,  and  ended  by 
declaring  that,  as  they  were  nominees  of  the  king  and  not 
representatives  of  the  nation,  they  were  not  competent  to 
make  new  grants.  Immediately  after  their  dismissal  the 
parliament  of  Paris,  which  next  to  the  ministry  was  the 


CAUSES   OF   THE   FRENCH   REVOLUTION. 


81 


hiirlust  authority  in  the  State,  brought  forward,  as  a  positive 
(Icmaii'l,  what  the  notables  had  only  negatively  suggested. 
Ill  11  foiiual  decree  they  demanded  that  an  Assembly  of 
the  States-general  should  be  called, —  an  Assembly  which 
the  monarchy  had  dispensed  with  for  two  hundred  years. 
The  luinistry  at  first  received  this  proposal  with  great  dis- 
favor; but  as  the  want  of  money  grew  more  and  more  urgent, 
the  alluring  hope  arose  in  their  minds  of  finding  in  the 
.States-general,  which  was  chiefly  composed  of  burghers,  a 
powerful  support,  against  the  privileged  classes.  We  shall 
lu'vcr  understand  the  \traordinary  success  of  the  first  revo- 
lutionary movements,  unless  we  bear  in  mind  what  a  large 
share  in  the  government  of  the  country  was  possessed  by 
the  liiiilier  orders  and  the  corporations,  and  how  they  now 
mutually  sought  each  other's  destruction. 

Calonnc  was  not  long  able  to  make  head  against  this  noisy 
opposition.  The  last  of  the  many  blows  which  caused  his 
fall  was  dealt  by  the  queen,  whom  he  afterwards  persecuted 
with  inextinguishable  hatred.  His  successor,  Brienne,  after 
a  violent  contest  with  the  parliaments,  resigned  his  office 
when  the  convocation  of  the  States-general  had  already  been 
determined  on,  and  the  national  bankruptcy  virtually  pro- 
claimed. Louis  had  recourse  to  Necker  again,  who  really 
relieved  the  financial  embarrassment  for  the  moment,  and 
recognizing  the  necessity  of  a  liberal  policy,  fixed  the  meeting 
of  the  States-general  for  the  27th  of  April,  1789.  The  fer- 
ment, which  owing  to  the  preceding  disputes  had  for  the  first 
time  since  the  religious  wars  penetrated  the  mass  of  the  peo- 
ple, increased  from  hour  to  hour.  The  agitation  was  princi- 
pally caused  by  the  question  whether  the  States-general  should 
meet  as  before  in  three  separate  chambers,  or  form  a  single 
assembly,  in  which  the  tiers  etat  should  have  a  double  number 
of  votes.  On  this  point  the  hitherto  allied  opposition  parties 
(lili'ercd,  the  aristocrats  advocating  the  separation,  the  liberals 
the  union  of  the  three  estates.  Necker,  with  great  want  of 
tact,  betrayed  his  own  views  by  assigning  the  double  number 
of  votes  to  the  tiers  ctat,  while  he  induced  the  government  to 
observe  an  obstinate  silence  on  the  main  point  in  question. 

6 


82 


ECONOMIC  HisTony. 


The  public  (lubatcs  on  this  subject  were  all  the  more  violent  in 
consccjuonce  ot  this  reticence,  and  in  Bretugne  it  came  to  an 
open  civil  war  between  the  nobility  and  the  burghers. 

The  radical  elements  in  France  saw  that  their  time  for  ac- 
tion was  come,  and  the  great  dearness  of  provisions  which 
prevailed  during  the  winter  months  placed  a  large  number  of 
desperate  men  at  the  disposal  oi  every  conspirator.     In  Paris 
the    revolutionary   demagogues    gathered    roimd   the   agents 
of  the  Dulie  of  Orleans,  and  at  the  end  of  April  tried  their 
strength  in  a  sanguinary  street  riot,  which  was  professedly 
directed  against  the  usurious  avarice  of  a  rich  manufacturer, 
but  really  had  no  other  object  than  to  intimidate  the  mod- 
erate party  before  the  im|)ending  election   of  the   States- 
general.*      In  other  respects  external  quiet  still  prevailed 
in  the  provinces;  but  the  feverish  agitation  of  men's  minds 
increased  with  every  day,  and  in  this  state  of  things  tlie 
elections  by  almost  universal    suffrage   began   to   be   hold, 
Every  electoral  college  was  to  intrust  its  instructions  and 
complaints  to  its  deputies,  according  to  mediasval   custom. 
In  every  district,  therefore,  a  long  list  of  abuses  was  drawn 
up  and  examined  and  brought  home   to  the  minds  of  the 
people  at  large  by  means  of  discussion.     A  modern  historian 
has  justly  observed  that  these  complaints  do  not  leave  a  sin- 
gle particle  of  the  ancien  rigime  untouched,  that  everything 
was  rejected  by  the  restless  desire  of  innovation,  and  that 
unfortunately  neither  the  possibility  nor  the  method  of  in- 
troducing  reforms   is   anywhere    pointed    out.     Revolution, 
universal  and   radical   revolution,   speaks  in   every  line  of 
these  documents.     There  was  but  one  thought  through  lln 
whole  of  France,  that  thenceforward  a  new  era  was  to  com- 
mence for  the  people  and  the  empire,  and  that  the  work  be- 
gun must  be  completed  in  spite  of  every  opposition. 

While  the  millions  in  every  part  of  the  country  were  thus 
emancipating  themselves  from  the  bonds  of  traditional  law, 
uncertain  about  their  future,  but  firm  in  their  resolution  to 
proceed,  the  government  was  daily  sinking  mure  and  more 

1  This  has  been  clearly  and  concisely  shown  by  Croker  in  his  "  Essays  on 
the  French  Revolution,"  p.  60. 


CAUSES  OF  THE  FRENCH  REVOLUnON. 


83 


into  iittor  lu'li)lo88nc88.  It  had  indeed  a  presentiment  of  the 
(laiiirirs  which  would  aecoini)any  the  breaking  out  of  the 
uuw  rpoch,  hut  its  destitution  was  so  complete  that  it  eagerly 
loiiiTcd  for  the  commencement  of  the  crisis.  Money,  one  of 
the  groat  factors  of  material  power,  was  not  to  be  found  in 
its  colTors,  and  even  the  other,  the  army,  was  already 
al'tVitiMl  by  the  general  process  of  dissolution.  This  is  per- 
liaps  the  most  important  circumstance  with  respect  to  the 
Hiil)so(itiout  course  of  the  French  Revolution,  and  its  difference 
from  all  those  which  have  since  taken  place  in  Europe.  The 
rt'usitu  is  simple  enough:  the  French  army  was  in  the  main 
()i'j:aui/A'(l  according  to  the  same  princijiles  as  the  other  dc- 
|)artm(nts  of  the  State,  and  like  them  had  been  thoroughly 
uiihin).a'il  by  the  contests  between  the  crown  and  the  feudal 
oriU'is  long  before  the  breaking  out  of  the  Revolution.  The 
nol)ility  alone  were  eligible  for  commissions  in  the  army, 
and  though  single  exceptions  to  this  rule  really  occurred,  yet 
the  monopoly  was  actually  limited  by  a  law  of  1781  to  noble- 
men of  four  descents.  Twenty-seven  regiments  belonged  to 
foreinn  or  native  grandees,  and  in  these  the  owner  of  each 
legimcnt  appointed  the  colonel  from  a  list  drawn  up  by  the 
minister  at  war,  and  the  cohmel  appointed  the  other  officers. 
The  inlhience  of  the  king's  government,  therefore,  in  the 
81'leetion  of  officers,  was  limited  to  the  composition  of  the 
list  of  candidates  for  the  single  office  of  colonel.  In  the  other 
divisions  of  the  army,  indeed,  the  highest  rank  was  in  the  gift 
of  tlie  king  alone,  but  of  the  other  commissions  only  one  half 
were  bestowed  by  the  king  and  the  other  half  by  the  colonel. 
The  officer  moreover  received  his  commission,  after  giving 
proofs  of  his  fitness,  on  payment  of  a  sum  of  money ;  it  was  a 
innehase  for  life,  as  in  the  case  of  the  courts  of  law  it  was  a 
punliase  of  an  hereditary  right.  The  duty  of  unconditional 
obedience  was  not  indeed  abrogated  by  this  system,  but  it 
was  inevitable,  especially  under  a  weak  government,  that  the 
corps  of  officers  should  feel  itself,  what  it  really  was,  a  part 
of  tliat  great  aristocracy  which  shared  with  the  king  the 
ruling  power  of  France  in  every  department  of  public  life. 
The  contest  between  this  nobility  and  the  ministry,  by  which 


IMAGE  EVALUATION 
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84 


ECONOMIC  HISTORY. 


I 


the  last  years  of  the  ancien  rigime  were  filled,  must,  there- 
fore, have  had  a  deep  effect  upon  the  army.  It  frequently 
occurred  that  the  officers,  like  the  judges,  with  their  colonels 
at  their  head,  refused  obedience.  And  as  in  the  rural  dis- 
tricts the  opposition  of  the  aristocracy  was  followed  by  ex- 
citement among  the  peasants,  and  the  opposition  of  the 
towns  by  excitement  among  the  artisans,  so  in  the  case  of 
the  army  the  popular  movement  found  its  way  into  the  minds 
of  the  soldiers,  and  operated  side  by  side  with  the  class  re- 
sistance of  the  officers.  The  common  soldiers  had  felt  the 
oppression  of  the  ancien  rSgime  perhaps  more  deeply  than  the 
peasants  themselves,  for  they  were  starving  on  a  pay  of  ten 
sous,  while  countless  sums  were  employed  in  rich  endow- 
ments for  1,171  generals.  They  suffered  all  the  insolence 
of  the  nobility  towards  the  canaille^  embittered  by  the  weight 
of  a  severe  and  often  brutal  discipline,  and,  like  their  fellow- 
citizens,  they  looked  forward  to  the  meeting  of  the  States- 
general  as  the  signal  of  I^'beration  from  intolerable  slavery. 
The  number  of  regiments  on  which  the  government  could 
reckon  was  extremely  small.  The  bands  of  discipline  were 
loosened  in  every  rank;  the  officers  inveighed  against  the 
despotism  of  the  ministers,  and  the  soldiers  promised  one 
another  to  do  nothing  against  the  people. 

The  ancient  polity,  therefore,  was  destroyed  by  its  own 
internal  discord  and  dissolution  before  a  single  revolutionary 
word  had  been  uttered.  The  government  was  destitute  of  money 
and  troops  to  defend  its  position,  and  the  feudal  seigniors, 
though  they  had  important  individual  rights,  had  no  general 
organization  which  could  enable  them  to  replace  the  govern- 
ment. As  soon  as  public  opinion,  which,  guided  by  radical 
theories,  emphatically  rejected  both  the  government  and  the 
aristocracy,  obtained  an  organ  of  power  in  the  States-general 
it  only  needed  to  declare  its  will,  nay,  only  to  give  expres- 
sion to  the  facts  before  them,  and  the  old  system  hopelessly 
collapsed  in  its  own  rottenness.  What  was  to  follow  no  man 
at  that  time  was  able  to  foresee.  As  most  men  were  ex- 
tremely ill-informed  respecting  the  condition  of  the  country, 
they  indulged  in  hopes  which  were  all  the  more  ardent  io 


CAUSES  OF  THE  FRENCH  REVOLUTION. 


85 


proportion  as  they  were  undefined.  But  there  were  many 
who  knew  the  poverty  and  brutality  of  the  masses,  the  bitter 
ha'red  between  rich  and  poor,  and  the  selfish  immorality  of 
the  upper  classes,  and  looked,  some  with  ambitious  pleas- 
ure, others  with  patriotic  anxiety  towards  a  stormy  future. 


m^ 


-11 


m 


It' 


'fl    I 


'I    • 


Fl '  I. 


86 


ECONOMIC  HISTORY. 


IV. 


THE  EDICTS  OF  STEIN  AND  IIARDENBERG. 


THE  EMANCIPATING  EDICT  OF  STEIN. 


Fkom  Seeley's  Life  and  Times  of  Stein,'  Vol.  I.  pp.  287-297, 


fi 


1807. 
T  CALL  by  this  name  the  great  edict  which  was  sipjned  on 
•*•  the  9th  of  October,  that  is,  only  five  days  after  Stein  had 
received  his  powers,  not  solely  because  it  contains  the  provi- 
sion that  from  a  certain  date  there  shall  be  only  free  persons 
in  the  States  of  the  King  of  Prussia.  It  is  indeed  to  be  re- 
marked that  the  principal  authors  of  the  measure  arc  so 
intoxicated  with  the  pride  of  being  the  bestowers  of  freedom 
upon  bondsmen  that  they  forget  to  remark  how  much  more 
and  how  many  other  emancipations  they  accomplished  by 
the  same  act.  Stein's  own  account  of  the  edict  of  October 
runs  as  follows:  — 

"The  measures  adopted  to  reach  the  above-mentioned  general 
object  were:  — 

*'  (1)  Abolition  of  personal  serfdom  in  the  Prussian  Motiarcby: 
by  an  Edict  of  October,  1807,  it  wa-s  decreed  that  from  October 
8th,  1800  (sic;  it  should  be  1810),  personal  serfdom  with  its  con- 
sequences, especially  the  very  oppressive  obligation  of  menial  ser- 
vice, should  be  abolished;  but  the  obligations  of  the  peasant,  as 
far  as  they  flowed  from  bis  possession  of  property,  remained  unal- 
tered. It  was  reserved  for  the  Chancellor  Hardenberg's  love  of 
innovation  (on  the  advice  of  a  H.  Scharrenweber,  a  dreamer  who 
died  in  a  madhouse  at  Eberbach  in  1820)  to  transform  in  1811  the 
relations  of  the  landlord  to  the  peasant  class,  and  its  inner  family 
relations  in  a  manner  pernicious  to  it;  in  this  I  had  no  share. 

«  (2)  The  transformation  of  the  peasants  on  the  Domain  in  East 
and  West  Prussia  into  free  proprietors." 

>  Univenity  Preis.  Cambridge,  Eng.,  1870. 


' »! 


EDICTS  OF  STEIN  AND  HARDEN  BERG. 


8T 


% 


Here  not  a  word  is  said  of  any  changes  made  by  the  Edict 
of  Octol)er  except  those  which  affected  the  peasant.  It  is 
the  same  aspect  of  the  edict  which  interests  Schon.  This 
edict,  he  says,  "has  made  the  figure  of  the  king  stand 
higher,  since  he  is  henceforth  no  longer  a  king  of  slaves,  but 
of  free  men."    And  again:  — 

"Thus  came  into  existence  the  law  of  Oct.  9th,  1807,  that 
Habeas  CorptM  Act  of  our  State.  The  idea  of  freedom  had  begun 
to  live.  With  ninety-nine  hundredths  of  the  people  it  rntde  a 
(Icpp  aiul  «'h'vating  iinpreaaion;  the  few  friends  of  slavery  intrigued 
and  inurimirfd  no  doubt  a  good  deal,  so  that,  according  to  Rhedi- 
ger's  story,  a  prejudiced  man  said  at  the  Berlin  Csisino  after  read- 
ing the  law,  '  Rather  three  battles  of  Auerstiidt  than  such  a  law!  * 
but  the  king  stood  firm,  and  God  maintained  the  right." 

In  stating  pretty  strongly  his  claims  to  be  considered  the 
real  author  of  the  law,  Schdn  uses  language  which  shows  that 
he  is  thinking  almost  exclusively  of  this  part  of  it.  "All 
else  that  1  did  in  life,"  he  says,  "was  as  nothing  compared 
to  callln<'  into  life  the  idea  of  freedom."  Onlv  from  one 
casual  expression  do  we  learn  that  he  even  knew  that  the 
measure  had  another  side,  where  he  says,  "  I  represented  that 
hereditary  serfdom,  that  scourge  of  our  country,  must  be 
brought  to  an  end,  and  that  a  proclamation  of  free  trade  in 
landed  property  would  be  sufficient  to  promote  material 
interests." 

Here  we  are  suddenly  introduced  to  something  quite  new,  f 
and  very  different  from  the  abolition  of  serfdom,   namely, 
free  trade  in  landed  property.  ' 

Up  to  a  certain  point  it  is  true  that  these  two  things  coin- 
cide. One  part  of  the  burden  of  serfdom  lay  in  the  incapac- 
ity of  the  serf  to  alienate  his  land,  but  this  is  a  small  matter. 
The  proclamation  of  free  trade  in  land  aflFectcd  all  classes  of 
society  at  once,  and  the  upper  and  middle  classes  much  more 
than  the  peasantry.  When,  therefore,  we  observe  that  the 
edict  of  the  9th  of  October,  at  the  same  time  that  it  abolished 
personal  serfdom,  removed  all  the  principal  restrictions  that 
interfered  with  traffic  in  land,  we  sec  that  it  is  in  fact  not  a 


■ ;  u 


IfM 


{■4' 


i-if 


ifi-.-^V: 


,)      . 


w 


'T^rrw 


88 


ECOyOMIC  HISTORY. 


wv-\y 


single  law,  but  two  laws  in  one,  and  two  laws  of  such  mag- 
nitude that  each  by  itself  might  be  considered  equivalent  to 
a  social  revolution. 

But  when  we  look  closer  still  we  discover  that  the  edict 
goes  even  further,  and  should  be  rather  described  as  three- 
fold than  as  twofold.  Englishmen  are  only  too  familiar  with 
the  notion  of  a  depressed  class  of  agricultural  laborers ;  but 
such  depression  may  be  of  two  kinds,  and  may  spring  from 
two  very  different  causes.  We  are  not  to  suppose  that  tb.; 
peasantry  of  Prussia  were  in  a  condition  resembling  that  of 
our  own  laborers  any  further  than  as  it  was  bad.  The  evilg 
afflicting  the  Prussian  peasantry  were  those  arising  out  of 
status;  those  which  afflict  English  laborers  arise  mainly  out 
of  contract.  The  English  laborer  is  nominally  free  and  at 
liberty  to  carry  his  industry  to  the  best  market;  he  is  re- 
duced to  real  dependence  by  his  inability  to  make  a  favorable 
bargain  for  himself.  The  Prussian  peasant  was  nominally 
a  serf,  but  in  reality  some  very  important  rights  were  se- 
cured to  him.  We  are  not  to  suppose,  for  instance,  that  cruel 
punishments  were  allowed,  or  that  he  was  subject  to  the  ca- 
price of  the  landlord.  He  was  far  more  of  a  proprietor  than 
the  English  laborer,  for,  though  on  a  degrading  tenure,  he 
did  for  practical  purposes  own  land.  Nor  were  his  interests 
neglected  as  those  of  a  freeman,  who  is  supposed  able  to  take 
care  of  himself,  may  be  neglected.  Not  only  was  he  a  mem- 
ber of  an  ancient  and  organized  village  community,  but  the 
Government  also  took,  and  was  obliged  to  take,  the  greatest 
possible  interest  in  his  class;  for  these  serfs  were  neither 
more  nor  less  than  the  Prussian  army. 

Now  it  might  very  plausibly  be  maintained  that  the  pro- 
clamation of  free  trade  in  land  would  not  create  a  happv 
peasant  class,  but  would  simply  substitute  for  a  peasantry 
laboring  under  certain  evils  that  class  of  famished  drudges 
whom  we  know  in  England,  and  who  if  they  cannot  be  called 
serfs  can  still  less  be  called  peasants,  for  a  peasant  properly 
so  called  must  have  a  personal  interest  in  the  land.  Hence 
the  conservative  opponents  of  Stein,  such  as  Marwitz,  actually 
declare  that  there  existed  no  slavery  or  serfdom  in  the  land 


ffw^ 


EDICTS  OF  STEIN  AND  UARDENDERG. 


89 


nj 


when  he  professed  to  abolish  it,  but  'Uhat  it  then  for  the 
first  time  began  to  appear,  namely,  the  serfdom  of  the  small 
holder  towards  the  creditor,  of  the  poor  and  sick  towards  the 
police  and  the  work-houses;"  and  again,  "that  with  the  pro- 
clamation of  free  trade  disappeared  the  previous  security  of 
the  peasantry  in  their  holdings.  Every  rich  landowner  could 
now  liny  them  out  and  send  them  ofif ;  fortunately,  scarcely 
anybody  was  ricli  any  longer!" 

These  were  the  criticisms  of  the  conservative  party,  which 
miirht  have  been  very  truly  applicable  to  a  simple  measure 
of  free  trade  in  land.  But  the  edict  of  October  had  in  fact 
taken  account  of  the  danger,  and  contained  an  express  pro- 
vision to  meet  it.  Hence,  as  I  have  said,  it  was  actually  a 
threefold  enactment,  for  not  only  did  it  first  abolish  serfdom, 
and  secondly,  establish  free  trade  in  land,  but,  thirdly,  it 
endeavored  to  guard  the  peasantry  against  the  danger,  which 
in  80  many  countries  has  proved  serious,  of  being  gradually 
driven  out  or  turned  from  proprietors  into  wage-receivers  by 
the  effects  of  the  unequal  competition  to  which  they  are 
exposed. 

At  the  same  time  that  we  carefully  distinguish  these 
different  enactments  all  included  in  one  legislative  edict, 
lot  us  be  as  careful  to  remark  what  was  not  included  in  it. 
Englishmen  are  apt  to  attribute  to  the  legislation  of  Stein  all 
the  innovations  introduced  in  this  period.  In  particular  it 
has  been  supposed  that  he  created  the  peasant-proprietorship 
of  modern  Prussia.  But  this  he  did  not  do,  excc|)t,  as  he 
says  in  the  passage  quoted  above,  on  the  Domain  Lands  of 
West  and  East  Prussia.  Proprietors  in  a  certain  sense  the 
peasantry  were  before  this  edict,  that  is,  they  cultivated 
land  for  themselves,  and  with  a  considerable  sense  of  secur- 
ity; proprietors  in  the  full  sense  they  were  not,  because  they 
held  of  a  landlord  to  whom  they  owed  various  dues  and 
services.  Now  Stein's  edict  altered  the  nature  of  these  ser- 
vices, and  abolished  the  most  oppressive ;  but^  it  did  not 
destroy  the  rights  of  the  landlord  or  leave  the  peasant  sole 
master  of  the  land  he  cultivated.  It  was  reserved  for 
Hardcnberg  to  do  this  by  an  edict  issued  on  Sept.  14,  1811, 


■'1 


1   j|^ 


'I.  ^'M 


m 


90 


ECONOMIC  HISTORY. 


and  it  should  be  noticed  that  Stein  expressly  declines  to  ac- 
cept any  responsibility  for  this  innovation.  Again,  it  is  not 
to  be  supposed  that  the  provision  just  mentioned,  by  which 
Stein  tried  to  prevent  the  absorption  of  the  small  holdings  bv 
the  great  proprietors,  has  actually  proved  the  means  of  pre- 
serving the  peasant  class  in  Prussia;  for  all  this  passed  away 
with  the  legislation  of  Hardenberg,  and  it  has  been  by  its 
own  vitality,  and  not  by  State  interference,  that  peasant- 
proprietorship  has  maintained  itself. 

Further,  it  is  to  be  remarked  that  Stein  is  quite  accurate 
when  he  describes  his  Land  Reform  as  not  consisting  sulely 
in  the  edict  of  October,  but  as  including  also  another  quite 
distinct  act  of  legislation,  which  applied  only  to  the  prov- 
inces of  East  and  West  Prussia.  This  act  belongs  to  July, 
1808,  and  is  confined  not  simply  to  the  peasants  of  these  two 
provinces,  but  to  a  particular  class  of  peasants,  namely, 
those  sometimes  called  immediate  peasants,  or  in  other  word» 
those  who,  living  on  the  Royal  Domaini:,  had  no  other  land- 
lord but  the  king.  It  is  evident  that  the  Government  could 
deal  with  these  more  easily  than  with  those  peasants  whose 
condition  it  could  not  improve  without  meddling  with  the 
rights  of  another  class.  The  extreme  distress  in  which 
these  two  provinces  lay,  and  which  the  Government  was  in 
no  condition  to  relieve  directly,  was  the  justification  for 
granting  privileges  to  these  particular  immediate  peasants, 
which  for  the  moment  were  not  extended  to  those  of  the 
other  provinces. 

Such  then,  defined  in  general  terms,  was  the  extent  of 
this  reform.  It  needs,  however,  a  much  closer  description. 
In  the  first  place  the  reader  must  guard  against  a  misappre- 
hension of  the  phrase  "free  trade  in  land"  into  which  he  is 
likely  to  be  led  by  his  English  experience.  Free  trade  in 
land  is  also  a  cry  of  our  own  reformers ;  but  we  must  beware 
of  supposing  that  what  they  call  for  is  the  same  thing  that 
was  granted  in  Prussia  by  Stein's  edict.  The  complaint  in 
England  is  that  a  number  of  practical  obstructions  prevent 
land  from  being  the  object  of  such  free  purchase  and  sale  as 
other  commodities.     Much  of  the  land  of  the  country,  it  is 


EDICTS  OF  STEIN  AND  HARDENBERG. 


91 


said  is  i"  ^^^  hands  of  persons  who  in  family  settlements 
have  given  up  the  right  to  alienate  it;  the  system  under 
which  landed  property  is  conveyed  is  so  cumbrous  and  ex- 
tionsivc  as  to  deter  people  from  transactions  of  the  kind; 
and  lastly  by  recognizing  the  principle  of  primogeniture  with 
icsiKJct  to  land  and  not  with  respect  to  personal  property  in 
cases  of  intestacy,  the  law  itself  countenances  the  notion  that 
lauded  property  stands  in  a  class  by  itself,  and  is  not  to  be 
dealt  with  or  transferred  as  if  it  were  purely  a  commodity. 
Now  it  is  an  instance  of  the  confusing  and  misleading  in- 
accuracy of  our  party  cries,  when  the  removal  of  these 
restrictions  is  called  free  trade  in  land.  Free  trade  in  other 
cases  moans  the  removal  of  restrictions  imposed  by  the  law 
or  l)y  the  government;  but  these  restrictions  are  of  quite  an- 
other kind.  Only  the  last  mentioned  is  the  work  of  the  law, 
and  it  cannot  in  any  proper  sense  be  called  a  restriction,  for 
the  only  way  in  which  it  operates  restrictingly  is  by  lending 
the  moral  influence  of  the  law  to  the  support  of  a  restrictive 
system.  The  cumbrousncss  of  our  conveyancing  is  merely 
the  result  of  the  gradual  way  in  which  our  land  system  has 
l)een  formed,  and  as  to  the  system  of  settlements,  so  far 
from  being  a  restriction  of  freedom,  it  is  the  direct  result  of 
freedom  of  contract, —  so  much  so  that  the  reformers  them- 
selves demand  an  interference  of  the  law  to  prevent  it ;  in 
other  words,  wish  to  promote  what  they  call  free  trade  by  a 
new  legal  prohibition. 

Now  when  Stein  is  said  to  have  established  free  trade  in 
land  the  expression  is  to  be  understood  literally.  The  hin- 
drances to  the  sale  and  purchase  of  land  which  he  removed 
were  not  accidental  practical  obstacles,  but  formal  legal  pro- 
hil)itions.  In  the  old  law  of  Prussia  and  in  the  Code  of 
Frederick  or  AUgemeines  Landrecht,  which  came  into  force 
in  1704,  it  is  laid  down  that  noble  estates  (adelige  Giiter) 
can  only  be  held  by  nobles,  and  that  persons  of  civic  origin 
(biirgorlicher  Herkunft)  can  only  acquire  them  by  express 
permission  of  the  sovereign.  In  the  same  way  peasant-land 
could,  as  a  rule,  only  be  held  by  peasants,  and  land  belong- 
ing to  towns  only  by  citizens.     We  are  familiar  with  the 


'^  '^1 


%.  • 


,11 


\ 


'i 


tl'H'    ( 


92 


ECONOMIC  HISTORY. 


idea  of  caste  as  applied  to  human  beings,  that  is,  of  an  una1< 
tcrable  %tatm  stamped  upon  a  man  from  his  birth ;  in  Prussia 
it  may  be  said  that  caste  extended  actually  to  the  land,  su 
that  every  rood  of  soil  in  the  country  was  of  a  dcfmitc  and 
unalterable  rank,  and,  however  it  might  change  its  owners, 
always  remained  either  noble  or  citizen  or  peasant  land. 
Now  the  first  innovation  contained  in  Stein's  edict  consisted 
in  cancelling  in  the  fewest  and  simplest  words  all  the  regu* 
lations  which  established  caste  in  land. 

When  the  edict  is  examined  more  closely  it  will  be  seen 
to  be  much  more  comprehensive  even  than  it  was  represented 
above  when  1  pointed  out  how  much  more  comprehensive  it 
was  than  w.is  commonly  supposed,  or  than  Stein  hiinself 
described  it.  For  at  the  same  time  that  it  abolishes  caste 
in  land  it  accomplishes  another  act  of  emancipation,  which 
is  in  no  way  expressed  in  the  phrase  free  trade  in  land ;  it 
removes  another  quite  distinct  set  of  restrictions  and  abol- 
ishes caste  in  persons.  The  Code  of  Frederick  prohibited 
the  nobleman  from  engaging  in  any  occupation  properly 
belonging  to  the  citizen,  and  only  allowed  under  certain 
conditions  the  citizen  to  pass  into  the  class  of  jjcasants  or 
the  peasant  into  the  class  of  citizens.  The  Nobles,  the  Citi- 
zens, the  Peasants ;  these  were  the  three  castes  into  which 
the  Prussian  population  outside  the  professions  was  dividid; 
into  one  or  other  of  them  each  person  was  born,  and  in  the 
same,  as  a  rule,  he  died.  To  each  caste  was  assigned  its 
special  pursuit.  The  Noble  cultivated  his  estate  and  exer- 
cised jurisdiction  over  the  peasantry  who  held  under  him, 
though  he  could  not  himself  hold  or  cultivate  peasant-land: 
he  also  served  the  king  in  civil  or  military  office.  Tiie 
Peasant  cultivated  his  plot  of  ground  rendering  fixed  servicis 
to  the  lord  and  subject  to  his  jurisdiction,  and  belon<re(i  nt 
the  same  time  to  the  rank  and  file  of  the  arm}'.  Between 
them  stood  the  Citizen,  holding  a  monopoly  of  trades  and 
industries  which  by  law  were  confined,  with  few  exceptions, 
to  the  towns.  It  is  remarkable  that  the  military  profession 
was,  for  the  most  part,  closed  to  him.  Tins  must  be  borne 
in  mind  when  we  compare  the  Seven  Years'  War  with  the 


EDICTS  OF  STEIN  AND  IIARDENDERG. 


93 


War  of  Liberation.  We  have  read  of  the  fearful  consump- 
tion of  men  caused  by  the  Seven  Years'  War,  and  of  the 
desperate  shifts  of  Frederick  to  procure  recruits;  but  we 
must  understand  that  no  levSe  en  masse  took  place  then,  and 
that  the  citizen  class  had  scarcely  any  share  in  what  waa 
•roin<'  forward.  This  is  the  more  to  bo  noted  because  the 
(Dnnection  between  the  citizen  class  and  the  learned  class 
was  closer  than  in  other  countries.  The  learning,  litera- 
ture, and  philosophy,  which  flourished  so  remarkably  in  that 
n*re  took  the  tone  of  the  middle  class,  and  a  curious  result 
followed.  In  the  most  military  of  all  modern  States,  litera- 
tiue,  because  it  sprang  from  a  class  which  enjoyed  an  ex- 
emption from  military  service,  and  as  a  consequence,  the 
tone  of  public  feeling  Avhich  is  determined  by  literature, 
was  in  an  especial  degree  wanting  in  the  military  spirit, — 
Schurnhorst  describes  the  army  as  being  generally  hated 
:iu(l  (Io9])iscd,  and  Kant  speaks  with  contempt  of  a  man  of 
education  who  had  embraced  a  military  life,  —  and  this  fact 
<riM-3  some  way  to  explain  that  phenomenon  of  a  military 
State  fighting  exceptionally  ill  which  we  have  so  long  had 
before  us. 

This  state  of  society  is  very  foreign  to  our  ideas,  and  may 

perhaps,  because  we  have  no  experience  of  it,  fascinate  some 

iniagiuations.     No  laissez  faire  here;  every  man's  place  is 

I  assigned  to  him  from  his  birth;  his  occupations  are  pre- 

[  8cril)cd,  and  a  great  taskmaster  or  earthly  Providence  stands 

at  the  head  of  the  whole  society,  which  may  be  called  army 

or  nation  at  pleasure,  since  even  the  unmilitary  citizens  were 

rc<rarded  by  the  State  principally  as  a  sort  of  commissariat 

jdopartment.     And  for  the  immediate  purpose  of  Frederick 

pVilliara  I.  and  Frederick  the  Great  the  system  was  well 

ladiipted,  for  that  purpose  was  simply  military.     A  place  for 

Icvery  man,  and  every  man  in  his  place;  the  "productive 

forces  of  the  country  perfectly  inventoried  and  a  debtor  and 

DreJitor  account  of  its  resources  kept ; "  *  by  such  a  system 

|lhc  rulers  could  wield  the  whole  force  of  the  country  most 

easily  and  certainly.     Nevertheless,  the  destruction  of  this 

1  Morier. 


'  ft 


L*?l 


w 


I  iil-i 


1    H  . 


M 


ECONOMIC  HISTORY. 


whole  gygtcm  by  a  stroke  of  Stein's  pen  was  now  regarded  as 
the  greatest  of  reforms  and  the  commencement  of  the  resto- 
ration of  Prussia.  For  it  will  be  evident  that  the  same  sys- 
tem which  concentrated  so  powerfully  and  measured  so  ex- 
actly the  forces  of  the  country  at  the  same  time  entirdj 
prevented  them  from  growing,  not  to  mention  the  intellect- 
ual stagnation,  outside  the  university  world,  which  was  pro- 
duced by  such  rigid  uniformity  of  life.  A  country  in  which 
no  man  can  follow  his  natural  bent,  take  to  agriculture  if  he 
does  not  like  trade,  or  to  trade  if  he  does  not  succeed  in  agri- 
culture, is  evidently  not  an  industrial  country.  Its  material 
resources  under  such  a  system  will  remain  undeveloped,  and 
if  it  be  a  poor  country,  as  Prussia  was,  the  system  will  actu- 
ally in  the  end  defeat  its  own  object,  for  such  a  country  from 
mere  poverty  will  be  weak  in  war. 

As  the  first  section  of  the  edict  abolished  what  I  hare 
called  "caste  in  land,"  so  the  second,  consisting  of  about 
three  lines,  abolished  caste  in  persons.     And  hero  it  ina; 
perhaps  be  observed  that  I  omitted  above  one  principal  cir- 
cumstance which  made  such  sweeping  changes  so  easy  to 
Stein.     Before  the  Peace  of  Tilsit  it  would  have  been  scarcely 
possible  to  carry  out  such  reforms,  however  much  the  rulen 
might  have  been  convinced  of  their  necessity.     Frederick  | 
had  shrunk  from  the  emancipation  of  the  serfs  because  he  I 
felt  that  it  would  introduce  disorder  into  his  army,  and  {or 
the  same  reason  these  reforms  also  would  have  been  scarcclj 
practicable  so  long  as  the  army  existed.     The  disasters 
brought  with  them  the  compensation  that  they  destroyed  tor  | 
a  moment  this  incubus.     The  necessity  of  maintaining 
great  position  in  Europe,  the  necessity  even  of  defend ingtlie  I 
country,  ceased  when  the  country  actually  fell  into  Frencli 
occupation;  and  thus,  as  we  may  say,  the  building  being  down 
it  was  for  the  first  time  possible  to  mend  a  defect  in  the  | 
foundations. 

These  reforms,  favored  as  they  were  by  circumstances  anil 
requiring  but  few  lines  in  the  edict,  were  yet  much  more 
fundamental  and  pregnant  with  consequences  than  any  suoiil 
practical  reforms  as  may  be  called  for  in  England  to  niaal 


EDICTS  OF  STEiy  AND  HARDENBERO. 


95 


the  purehnso  of  land  more  easy.  Thoy  were  a  sort  of  Magna 
Churta  to  the  Prussians,  and  Schon  might  well  have  applied 
to  tht'in  the  enthusiastic  expressions  which  he  keeps  for  the 
IscctioiiH  which  emancipated  the  serf.  In  v.  Ronne's  stand- 
lard  text-l)ook  of  Prussian  Constitutional  Law  I  find  in  the 
lehaiitor  on  Rights,  under  the  first  title.  Freedom  or  Security 
lof  the  Person,  that  this  freedom  is  compoBcd  of  three  rights : 
1(1)  the  ri>;ht  of  movement  and  free  choice  of  abode  (Freizii- 
Ijfijrkcit);  (iJ)  the  right  of  emigration  (Auswanderungsrecht) ; 
|(;J)  the  ritjht  of  choosing  a  calling  or  trade  (Freio  Wahl  von 
jBenif  «nd  Gcwerbc);  and  this  third  right,  we  arc  informed, 
I -as  driven  to  the  Prussians  by  the  edict  of  October,  1807. 
iThe  same  is  said  of  the  first  of  the  rights  which  go  to  make 
lu])  the  second  title;  namely,  free  right  to  the  acquisition 
land  possession  of  property  (Freies  Rccht  zum  Erwerbe  und 
iBesitzo  des  Eighenthums). 

I  proceed  to  give  the  text  of  this  edict,  the  vast  impor- 
itanco  of  which  will  have  by  this  time  become  clear.  The 
less  important  sections  arc  printed  in  a  smaller  type,  and  of 
§§  III.  and  v.,  as  purely  technical,   only  the  heading  is 


"II 

,  fc.V' 

4 


\  iM 


nvcn. 


^d'td  concerning  the  facilitation  of  possession  and  the  free  use  of 
landed  property,  as  wc'.l  as  the  personal  relations  of  the  inhabi- 
tants of  the  country. 

\Vk,  Fri'ili-rick  William,  by  the  grace  of  God  King  of  Prussia,  &c.,  &c., 

Muke  known  horeby  and  give  to  understand.    Since  the  U'ginning  of  the 

lace  We  have  bi-i'n  liefore  all  things  occupied  with  the  care  for  the  de- 

bri'ssed  coiidirion  of  Our  faithful  subjects,  and  the  speediest  restoration 

knd  •;rt'ati>st  iinprnveinent  of  it.     We  have  herein  considertd  that  in  the 

pnivirsal  iieid  it  passes  the  means  at  Our  command  to  furnish  help  to  each 

udiviihial,  and  yet  We  could  not  attain  the  ol)ject ;  and  it  accords  equally 

iritli  the  iiiipiTative  demands  of  justice  and  with  the  principles  of  a  proper 

kntiiiniil  ei'ononiy,  to  remove  all  the  hindrances  which  hitherto  prevented 

|lie  individual   from  attaining   the   prosperity  which,  according  to  the 

icasure  of  his  powers,  he  was  capable  of  reaching;   further.  We  have 

onsideri'd  that  the  existing  restrictions,  partly  on  the  possession  and  en- 

yment  of  landed  property,  partly  on  the  personal  condition  of  the  agri- 

uitural  laborer,  specially  thwart  Our  benevolent  purpose  and  disable  a 

;reat  force  whiih  might  be  applied  to  the  restoration  of  cultivation,  the 


•  I'i,  ,  I 


96 


ECONOMIC  HISTORY. 


former  by  their  prejudicial  influence  on  the  value  of  landed  property  and 
the  credit  of  the  proprietor,  the  latter  by  diniinishing  the  value  of  labor. 
We  purpose,  therefore,  to  reduce  both  within  the  limits  required  by  tht 
common  well-being,  and  accordingly  ordain  as  follows :  — 

§  I.     Freedom  of  Exchange  in  Land. 

Every  iuhubitaut  of  our  States  is  competent,  without  any  limita- 
tion on  the  part  of  the  State,  to  possess  either  as  property  or  pledge 
landed  estates  of  every  kind :  the  nobleman  therefore  to  possess  not 
only  noble  but  also  non-noble,  citizen,  and  peasant  lands  of  everr 
kind,  and  the  citizen  and  peasant  to  possess  not  only  citizen,  pea.«- 
ant,  and  other  nun-noble,  but  also  noble,  pieces  of  laud,  without 
either  the  one  or  the  other  needing  any  special  permission  for  aiiv 
acquisition  of  land  whatever,  although,  henceforward  as  before, 
each  cliange  uf  ])ossessiun  must  be  announced  to  the  authorities. 

§  II.     Free  Choice  of  Occupation. 

Every  noble  is  henceforth  permitted  without  any  derogation  from 
his  position,  to  exercise  citizen  occupations;  and  every  citizen  or 
peasant  is  allowed  to  pass  from  the  peasant  into  the  citizen  class. 
or  from  the  citizen  into  the  peasant  class. 

§   III.     How  far  a  legal  right  of  Pre-emption  and  a  First  Claim  stiU 
exist. 

§   IV.     Division  of  Lands. 

Owners  of  Estates  and  Lands  of  all  kinds,  in  themselves  alienable  either 
in  Town  or  Country,  are  allowed,  after  due  notice  given  to  the  provineial 
authority,  with  reservation  of  the  rights  of  Direct  Creditors  anti  of  those  I 
who  have  the  right  of  pre-emption  (§  III.),  to  separate  the  principal  estate 
and  its  parts,  and  in  general  to  alienate  piecemeal.     In  the  same  way  C»  j 
proprietors  may  divide  among  them  property  owned  in  common. 

§  V.     Granting  of  Estates  under  Leases  for  a  Long  Term. 

§  VI.     Extinction  and  Consolidation  of  Peasant  Holdings. 

When  a  landed  proprietor  believes  himself  unable  to  restore  or  I 
keep  up  the  several  peasant  holdings  existing  on  an  estate  wiiicli 
are  not  held  by  a  hereditary  tenure,  whether  of  a  long  lease  or oi 
copyhold,  he  is  required  to  give  information  to  the  government  oi 
the  province,  with  the  sanction  of  which  the  consolidation,  eitli« 
of  several  holdings  into  a  single  peasant  estate,  or  with  demtsnt 
land,  may  be  allowed  as  soon  as  hereditary  serfdom  shall  have 
ceased  to  exist  on  the  estate.  The  provincial  Authorities  will  1«  j 
provided  with  a  special  instruction  to  meet  these  cases. 

§  VII.     If,  on  the  other  hand,  the  peasant  tenures  are  hereJ 
itary,  whether  of  long  lease  or  of  copyhold,  the  consolidation  oi 


:i  ..1 


EDICTS  OF  STEIN  AND  HARDENBERG. 


97 


„tli(T  alteration  of  the  condition  of  the  lands  in  question,  is  not 
admissible  until  the  right  of  the  actual  possessor  is  extinguished, 
whether  by  the  purchase  of  it  by  the  lord  or  in  some  other  legal 
way.     I"  t'''"*  *■''*'*'  *''*^  regulations  of  §  VI.  also  .apply. 

§  VIII.  Indel)teilness  of  Feudal  and  Entailed  Estates  in  consequence 
of  the  Uavi><r('8  of  War. 

Everv  j)ossessor  of  feudal  or  entailed  property  is  empowered  to  raise  the 
«iims  rccjiiired  to  replaee  the  losses  caused  by  war,  by  mortgaging  the  sub- 
stanre  <if  the  Estates  themselves,  as  well  as  the  revenues  of  them,  provided 
the-  aiiplication  of  the  money  is  attested  by  the  Administrator  (Landrath) 
(if  tlic  Circle  or  the  Direction  of  the  Department.  At  the  end  of  three 
viars  from  the  oontraeting  of  the  debt  the  |iossessor  and  bis  successor  are 
lioiind  to  pay  off  at  least  the  fifteenth  part  of  the  capital  itself. 

§  IX.  Kxtinction  of  Feudal  Relations,  Family  IScttlcments,  and  En- 
tail*, by  Family  Resolution. 

Every  feudal  connection  not  subject  to  a  Chief  Proprietor,  every  family 
"cttlcment  and  entail  may  be  altered  at  pleasure  or  entirely  abolished  by  a 
Famiiv  Resolution,  as  is  already  enacted  with  reference  to  the  East  Prus- 
>ian  Fii'fs  (except  those  of  Ermeland)  in  the  East  Prussian  Provincial  Law, 
.Vppendix  36. 

§  X.     Abolition  of  Villainage. 

From  the  date  of  this  Ordinance  no  new  relation  of  villainage, 
whether  by  birth,  or  marriage,  or  acquisition  of  a  holding,  or  by 
contract,  can  come  into  existence. 

§  XI.  With  the  publication  of  the  present  Ordinance  the  exist- 
ing CDiulition  of  villainage  of  those  villains  with  their  wives  and 
children  who  pos.ses8  their  peasant-holdings  by  hereditary  tenures 
of  whatever  kind  ceases  entirely  both  with  its  rights  aiul  duties. 

§  XII.  From  Martinmas,  1810,  ceases  all'  villainage  in  Our 
entire  States.  From  Martinmas,  1810,  there  shall  be  only  free  per- 
sons, its  this  is  already  the  case  upon  the  Domains  in  all  Our  prov- 
inces; free  persons,  however,  still  subject,  as  a  matter  of  cour.se,  to 
all  the  obligations  which  bind  them  as  free  persons  by  virtue  of 
the  possession  of  an  estate  or  by  virtue  of  a  special  contract. 

To  this  declaration  of  Our  royal  Will  every  man  whom  it  may  concern, 
ami  in  |)art;cular  Our  provincial  and  other  governments,  .ire  exactly  and 
loyally  to  conform  themselves,  and  the  present  Ordinance  is  to  be  made 
universally  known. 

Authentically,  under  Our  royal  Signature.  Given  at  Memel,  Oct.  9th, 
1807. 

Friedrich  Wilhelm, 
Schrotter,  Stein,  Scbrbtter  II. 
7 


■■♦v. 


:v% 


98 


ECONOMIC  HISTORY. 


The  elder  Schrotter  was  at  this  time  minister  for  the  prov- 
ince of  Prussia,  and  he  with  his  brother  was  entrusted  with 
the  task  of  publishing  the  Ordinance  in  the  province  where 
it  had  received  the  king's  signature.  It  is  for  this  reason 
that  their  names  are  affixed  to  it  along  with  Stein's. 

That  threefold  character  of  the  edict  which  was  pointei] 
out  above  will  appear  very  visibly  by  observing  the  three 
groups  of  sections,  which  on  account  of  their  especial  impor- 
tance have  been  printed  in  large  type.  The  abolition  of  caste 
both  in  land  and  in  persons  is  accomplished  in  the  first  two 
sections ;  the  abolition  of  villainage  in  the  last  three,  which 
it  is  evident  might  as  well  have  composed  a  separate  edict 
Sections  six  and  seven  are  introduced  to  prevent  the  svstem 
of  free  trade  in  land  from  bearing  too  hard  on  the  peasant 
and  making  the  proprietorship  of  land  a  monopoly  of  the 
richer  classes.  .  .  . 


THE  AGRARIAN  LEGISLATION  OF  HARDENBERG. 


From  Morier's  "  The  Agrarian  Legislation  of  Prussia  durkng 

THE  PRESENT  CeNTURY,"  IN   "  SYSTEMS  OF  LaND  TeNURE   IN  VARI- 
OUS Countries.  "»    pp.  306-316. 

1811. 

The  edict  of  1807,  great  and  incisive  as  had  been  its 
operation,  was  of  a  negative  kind.  It  removed  disabili- 
ties, undid  the  shackles  which  bound  the  peasant  to  the 
glebe,  allowed  such  rights  as  existed  to  be  used  freely,  anil 
pulled  down  the  walls  which  separated  from  each  other  the 
different  classes  of  society.  But  it  created  no  new  forms  of 
property ;  it  proclaimed  freedom  of  exchange,  but  it  did  not 
provide  the  title-deeds  required  as  the  first  condition  of  ex- 
change. Peasants*  land  could  now  be  held  indiscriminately 
by  all  the  citizens  of  the  State;  but  it  was  still  held  under 
the  old  forms  of  tenure;  there  were  still  two  "dominia." 
The  lord  was  still  owner  of  the  peasants'  land,  but  had  no 

>  London :  Macmillan  &  Co.,  1870. 


EDICTS  OF  STEIN  AND  HARDENBERG. 


99 


ri<rlit  to  its  possession.  The  peasant  was  free  but  was  not 
master  of  his  labor. 

The  legislation  of  1811  stepped  in  to  remedy  this  state  of 
tilings,  and  applying  to  the  monarchy  generally  the  princi- 
i)los  which  during  the  last  three  years  had  proved  in  the 
hi  "host  degree  successful  when  applied  to  the  State  domains, 
it  SL't  itself  to  substitute  allodial  ownership  for  feudal  ten- 
ure.   Its  work  was  in  the  highest  degree  positive. 

The  legislation  of  1811  mainly  consists  of  two  great 
edicts,  both  bearing  the  same  date,  that  of  the  14th  of  Sep- 
t^,,„l,er, — the  one  entitled  "Edict  for  the  Regulation  of  the 
Rehitions  between  the  Lords  of  the  Manor  and  their  Peas- 
ants;" the  other,  "Edict  for  the  better  Cultivation  of  the 
Land." 

Tlie  first  is  concerned  with  the  creation  of  new  title-deeds 
for  the  peasant  holders,  and  with  the  commutation  of  the 
services  rendered  in  virtue  of  the  old  title-deeds. 

The  second  surveys  the  whole  field  of  agrarian  reform,  and 
introduces  general  measures  of  amelioration. 

The  preamble  to  the  "  Edict  for  the  Regulation  of  the  Re- 
lations between  Landlord  and  Tenant"  recites  how  "We, 
Frederick  William,  by  the  grace  of  God,  King  of  Prussia,  hav- 
insr  convinced  ourselves,  both  by  personal  experience  in  our 
own  domains,  and  by  that  of  many  lords  of  manors,  of  the 
great  advantages  which  have  accrued  both  to  the  lord  and  to 
the  peasant  by  the  transformation  of  peasant  holdings  into 
property,  and  the  commutation  of  the  services  and  dues  on 
the  basis  of  a  fai'-  indemnity,  and  having  consulted,  in  re- 
gard to  this  weighty  matter,  experienced  farmers,  and  skilled 
persons  of  all  kinds  belonging  to  all  our  provinces,  and  to 
all  ranks  of  our  subjects,  ordain  and  decree  as  follows : " 

The  edict  then  branches  off  into  two  main  parts, —  the 
first  dealing  with  peasant  holdings  in  which  the  tenant  has 
hereditary  rights;  the  second  with  holdings  in  which  the 
tenant  has  no  hereditary  rights. 


^^^ 


100 


ECONOMIC  HISTORY. 


PART  I 

All  tenants  of  hereditary  holdings,  that  is,  holdings  which 
are  inherited  according  to  the  common  law,  or  in  which  the 
lord  of  the  manor  is  bound  to  select  as  tenant  one  or  other 
of  the  heirs  of  the  last  tenant,  whatever  the  size  of  the  JiohUng, 
shall  by  the  present  edict  become  the  proprietors  of  their 
holdings,  after  paying  to  the  landlord  the  indemnity  fixed 
by  this  e("ct.  On  the  other  hand,  all  claims  of  the  peasant 
on  the  manor,  for  the  keeping  in  repair  of  his  farm-buildings, 
etc.,  shall  cease. 

We  desire  that  landlords  and  tenants  should  of  themselves 
come  to  terms  of  agreement,  and  give  them  two  years  from 
the  date  of  the  edict  to  do  so.  If  within  that  time  the  work 
is  not  done,  the  State  will  undertake  it. 

The  rights  to  be  commuted  may  be  thus  generally  classed :  — 

I.  Rights  of  the  landlord. 

1.  Right  of  ownership  ("dominium  directum  "). 

2.  Claim  to  services. 

3.  Dues  in  money  and  kind. 

4.  Dead  stock  of  the  farms. 

5.  Easements  od  servitudes  on  the  land  held. 

II.  Rights  of  the  tenant.* 

1.  Claim  to  assistance  in  case  of  misfortune. 

2.  Right  to  gather  wood  and  other  forest  rights  in  the 

forest  of  the  manor. 

3.  Claim  upon  the  landlord  for  repairs  of  buildin<rs. 

4.  Claim  upon  the  landlord  in  case  tenant  is  unable  to 

pay  public  taxes. 

5.  Pasturage  rights  on  demesne  lands  or  forests. 

Of  these  different  rights  only  a  few,  namely,  the  dues  paid 
in  kind  or  money,  the  dead  stock  and  the  servitudes,  are  capa- 

*  It  is  worthy  of  remark  that  the  tenant's  "  dominiunn  utile,"  or  rifflif  of  pos- 
session, is  not  recorded  as  a  set-off  against  the  dominium  directum  of  tlie  lord 
of  the  manor.  The  fact  is,  tliis  riglit  of  possession  is  something  so  st'lfunder 
stood,  that  it  never  seems  present  to  the  mind  of  the  legislator.  The  "domin- 
ium directum  "  is  something  quite  different,  for  it  represents  an  ngproirntinnnf 
all  kinds  of  different  rights.  These  rights  he  has  to  sell  to  the  poiisnnt,  and 
the  peasant  buys  them  with  the  only  thing  he  possesses,  viz.,  the  land. 


EDICTS  OF  STEIN  AND  HARDENBERG. 


101 


ble  of  exact  valuation.     The  others  can  only  be  approxi- 
mately estimated. 

To  obtain,  therefore,  a  solid  foundation  for  the  work  of 
commutation,  and  not  to  render  it  nugatory  by  difficulties  im- 
possible to  be  overcome,  we  deem  it  necessary  to  lay  down 
certain  rules  for  arriving  at  this  estimate,  and  to  deduce 
those  rules  from  the  general  principles  laid  down  by  the  laws 
of  the  State.     These  principles  are :  — 

1.  That  in  the  case  of  hereditary  holdings,  neither  the 

services  nor  the  dues  can,  under  any  circumstances, 
be  raised. 

2.  That  they  must,  on  the  contrary,  be  lowered  if  the  holder 

cannot  subsist  at  their  actual  rate. 

3.  That  the  holc'ing  must  be  maintained  in  a  condition 

which  will  enable  it  to  pay  its  dues  to  the  State. 

From  these  three  constitutional  principles,  as  well  as 
from  the  general  principles  of  public  law,  it  follows  that  the 
rijjht  of  the  State,  both  to  ordinary  and  extraordinary  taxes, 
takes  precedence  of  every  other  right,  and  that  the  services 
to  tlie  manor  are  limited  by  the  obligation  which  the  latter 
is  under  to  leave  the  tenant  sufficient  means  and  to  pay 
taxes. 

Wc  consider  that  both  these  conditions  are  fulfilled  when 
the  sura-total  of  the  dues  and  services  rendered  to  the 
manor  do  not  exceed  one-third  of  the  total  revenue  de- 
rived by  an  hereditary  tenant  from  his  holding.  Therefore, 
with  the  exceptions  to  be  hereafter  described,  the  rule  shall 
obtain: 

That  in  the  case  of  hereditary  holdings  the  lords  of  the 
manor  shall  be  indemnified  for  their  rights  of  ownership  in 
the  holdinn;,  and  for  the  ordinary  services  and  dues  attached 
to  the  holding,  when  the  tenants  shall  have  surrendered  one 
third  portion  of  all  the  lands  held  by  them,  and  shall  have 
renounced  their  claims  to  all  extraordinary  assistance,  as 
well  as  to  the  dead  stock,  to  repairs,  and  to  the  payment  on 
I  their  behalf  of  the  dues  to  the  State  when  incapable  of 
doing  80. 


I 


'f '  ^''  ■ 


II'' 


102 


ECONOMIC  HISTORY. 


The  edict  then  goes  on  to  lay  down  the  rules  to  be  ob 
served  in  applying  this  principle. 

These  rules  presuppose  the  existence  of  the  agricultural 
community  referred  to  in  the  earlier  part  of  this  paper, 
namely,  equal  allotments  in  an  arable  mark;  the  division 
of  the  arable  mark  in  which  those  several  allotments  are 
situated  into  three  "  Commonable  Fields, "  or  "  Fluren ; "  a 
common  system  of  cultivaiion  obligatory  on  the  community, 
in  order  to  secure  the  community's  right  of  pasture  on 
the  fallow  and  stiibbles ;  and  common  rights  of  property  in 
common  lauds  occupied  "de  indiviso,"  mostly  pasture  lands. 
woods,  etc.,  but  sometimes  also  in  arable  common  Innds. 
As  the  rule,  the  lord  of  the  manor  is  to  acquire  posscasion 
of  one  of  the  three  Fields,  or  of  one  third  portion  of  each 
field,  and  of  one  third  portion  of  the  common  lands. 

We  have  no  space  to  enter  into  the  details  of  the  ar- 
rangements which  provide  for  the  cases  differing  from 
these. 

As  noted  above,  the  lords  and  the  peasants  are  left  free  to 
make  what  arrangemejits  they  please,  as  long  as  the  propor- 
tion of  one  third  is  maintained;  that  is,  the  indemnity  maj 
take  the  form  of  a  payment  of  capital,  or  of  a  corn  or  money 
rent.  Yet  the  rule  to  be  followed  (and  a  departure  from  this 
rule  must  have  a  diijtinct  motive)  is  that  the  indemnity  must 
be  paid  in  land  whdre  the  holdings  are  over  fifty  "morgen,"' 
but  in  the  shape  of  a  corn-rent  where  the  holdings  are  under 
that  size. 

As  a  matter  of  practical  convenience  to  both  parties,  the 
absolute  separation  of  proprietary  rights  suffers  some  feir 
exceptions;  the  first  and  most  important  is  that  the  lord 
retains  the  right  of  pasturing  the  manorial  sheep  on  tw  j 
thirds  of  the  fallow  and  stubbles  of  the  arable  mark;Mlie 
peasant  also  continues  to  enjoy  the  right  of  collecting  as 
much  firewood  in  the  demesne  as  he  requires  for  his  per- 


^  The  Prussian  acre  is  about  equal  to  two  thirds  of  an  Englisii  acre,  u  | 
hundred  English  acres  being  equal  to  168^  Prussian  acres. 

>  Compare  Rogers'  "  History  of  Agriculture  and  Prices  in  England,"  toU  I 
p.  31. 


EDICTS  OF  STEIN  AND  HARDENBERG. 


103 


sonal  use.  For  this  right  and  for  the  acquisition  of  his  house 
and  farm-buildings  as  well  as  his  garden-plot  (his  allot- 
lutnt  in  the  mark  of  the  township)  he  continues  to  render 
serviies  to  the  lord  of  the  manor  at  times  (for  example,  har- 
vest) when  extra  hands  are  wanted.  These  services  are 
however  restricted  to  a  maximum  of  ten  days  of  team- 
work, and  ten  days  of  hand-labor  for  a  team-peasant,  and 
ton  ihiys'  aian's-work  and  ten  days'  woman's-work  for  a  hand 
peasant. 

Several  paragraphs  of  the  edict  are  taken  up  with  provi- 
sions tor  8u  apportioning  the  burdens  on  the  holdings  that 
nothin;j;  shall  prevent  their  dismemberment,  and  being  sold 
or  exchanged  in  single  parcels.  Among  these  provisions  is 
one  iircventiug  the  peasant  from  mort;3'aging  his  estate  above 
one  fourth  of  its  value.  Where  corn-rents  are  not  paid 
punctually  the  lord  of  the  manor  can  exact  services  instead. 


PART  IL 

The  class  of  holdings  treated  of  in  the  second  part  are 
those  held  at  will,  or  for  a  term  of  years  or  for  life.  In 
these  cases  the  landlord  gets  an  indemnity  of  one  half  of  the 
holdings  under  much  the  same  conditions  as  in  the  case  of 
the  hereditary  holdings.  When  the  conditions  differ  they 
do  so  in  favor  of  the  lord  of  the  manor. 

By  the  edict,  of  which  the  above  are  the  main  provisions, 
entirely  new  conditions  of  land  occupation  were  inaugurated, 
and  corresponding  changes  became  necessary  in  the  other 
branches  of  the  agricultural  system. 

The  "Edict  for  the  better  Cultivation  of  the  Land,"  pub- 
lished on  the  same  day,  had  these  changes  in  view. 

Fully  to  understand  what  these  changes  were,  and  what 
was  the  natnre  of  the  agricultural  reforms  to  be  introduced 
into  Prussia,  the  picture  of  the  peasant  community  as  a  mi- 
crocosrnic  reproduction  of  the  old  community  of  the  mark 
miist  be  kept  in  mind.  The  peasant  occupier's  tenement  is 
situated  apart  from  his  land  in  a  village  or  township;  his 
estate  is  made  up  of  a  number  of  single  lots  or  parcels 
(Grundstiicke)  distributed  over  the  three  main  divisions  or 


104 


ECONOMIC  HISTORY. 


■m. 


Fields  (Flurcn,  Campi)  into  which  the  arable  mark  is  di- 
vided. Often  intermixed  with  these  peasant  parcels,  and 
subject  to  tlic  same  obligatory  cultivation,  are  parcels  of  de- 
mesne lands.  In  addition  to  his  individual  rights  of  posses- 
sion in  the  arable  mark,  controlled  by  the  common  rights  of 
pasturage  on  the  stubbles,  he  has  common  rights  in  the 
common  pasture,  which  common  rights  he  shares  witli  the 
lord  of  the  manor.  Besides  these  rights  he  has  rights  of 
pasture,  etc.,  in  the  forest  lands  of  the  demesne  proper.  The 
sum  total  of  these  individual  and  common  rights  make  up 
the  peasant  holding,  correlative  to  which  are  the  services  to 
be  rendered  to  the  manor.  As  long  as  these  services  were 
calculated  on  the  sum  total  of  the  rights  enjoyed  by  the 
tenant,  it  was  of  paramount  importance  that  no  dismember- 
ment should  take  place.  Consequently,  even  in  the  case  of 
freeholders,  none  but  exceptional  dismemberments  were 
allowed. 

Apart  then  from  the  relations  between  landlord  and  ten- 
ant, or  rather  inseparably  implicated  in  those  relations,  and 
therefore  requiring  simultaneous  regulation  are  the  common 
rights  of  the  peasants'  themselves,  and  the  impediments 
which  these  common  rights  throw  in  the  way  of  individual 
cultivation,  and  the  free  use  of  the  rights  of  property  to  be 
granted. 

The  ruling  idea  of  the  "Edict  for  the  better  Cultivation  of 
the  Land,"  as  of  its  predecessor,  and  indeed  of  the  whole 
legislation  connected  with  the  names  of  Stein  and  Harden- 
berg,  is  to  enfranchise  not  the  owner  of  land  merely,  but 
likewise  the  land  owned  by  him,  and  to  remove  every  im- 
pediment in  the  way  of  the  soil  finding  its  way  out  of  hands 
less  able  to  cultivate  it  into  those  better  able  to  cultivate 
it.  Conformably  to  these  principles,  the  edict  in  questioa 
in  the  first  place,  removes  all  restrictions  still  existing  in 
the  way  of  free  exchange  in  land,  in  so  far  as  private  rights 
(namely,  rights  arising  from  entails,  servitudes,  etc.)  are 
not  affected.  By  this  proviso  the  restrictions  contained  in 
paragraphs  six  and  seven  of  the  edict  of  1807  were  removed. 
the  difference  between  tenant's  lands  and  demesne  land 


EDICTS  OF  STEIN  AND  HARDEN DERG. 


105 


ponsi'd,  and  the  lord  of  the  manor  could  freely  acquire  the 
former  without  the  previous  sanction  of  the  State.  On  the 
other  Imnd,  by  the  perfect  liberty  granted  for  dismemberment 
(the  maxim  being  laid  down  that  it  was  better  both  for  the 
cultivator  and  for  the  land  cultivated  that  the  former  should 
administer  a  small  unencumbered  estate  rather  than  a  large 
cncmnl)ered  one),  the  advocates  of  the  "  petite  culture  "  were 
conciliated.  The  passage  in  the  edict  is  worth  quoting  in  ex- 
(eim,  as  it  contains  very  explicitly  what  we  have  described  as 
the  ruling  idea  of  the  legislation  we  are  discussing;  an  idea, 
it  is  true,  which  only  attained  its  full  development  forty 
years  later,  but  which,  nevertheless,  in  spite  of  the  obstacles 
thrown  in  its  way  by  the  successors  of  Stein  and  Hardenberg, 
took  auHicient  root  even  at  this  early  period  to  enable  us  to 
judge  of  its  fruits.  It  is  the  idea  of  ownership  versus  ten- 
anci/,  and  of  absolute  freedom  of  exchange  and  disposal; 
and  special  importance  attaches  to  it  as  representing  princi- 
ples opposed  both  to  the  French  system  of  compulsory  divi- 
sion and  to  the  English  system  of  tenancy,  primogeniture, 
and  strict  settlement.  The  passage  we  refer  to  runs  on  as 
follows :  — 

"The  proprietor  shall  henceforth  (excepting  always  where  the 
rights  of  third  parties  are  concerned)  be  at  liberty  to  increase  his 
estate,  or  diminish  it  by  buying  or  selling,  as  may  seem  good  to 
liira.  He  can  leave  the  appurtenances  thereof  (the  *  grund- 
stiicke,'  or  parcels  distributed  in  the  three  Fields)  to  one  heir  or  to 
many,  as  he  pleases.  He  may  exchange  them  or  give  them  away, 
or  dispose  of  tliem  in  any  and  every  legal  way,  without  requiring 
any  authorization  for  such  changes. 

"This  unlimited  right  of  disposal  has  great  and  manifold  advan- 
tages.   It  affords  the  safest  and  best  means  for  preserving  the  pro- 
j  prietor  from  debt,  and  for  keeping  alive  in  him  a  lasting  and  lively 
i  interest  in  the  improvement  of  his  estate,  and  it  raises  the  general 
I  standard  of  cultivation. 

"The  first  of  these  results  is  obtained  by  the  power  it  gives  to 
the  actual  proprietor,  or  to  an  heir  upon  entering  on  his  estate,  to 
stll  such  portions  as  will  enable  him  to  provide  for  his  heirs  or  co- 
neirs,  as  the  case  may  be,  or  for  any  other  extraordinary  emecr 


t  ^  'I 


%,-• 


106 


ECONOMIC  HISTORY. 


gcncy,  leaving  what  remains  of  the  property  unencumbered  with 
mortgages  or  settlements. 

'*Tlie  interoHt  in  the  estate  is  kept  alive  by  the  freedom  left  to 
parents  to  divide  their  estate  among  their  children  as  they  think 
fit,  knowing  that  the  benetit  of  every  improvement  will  be  reaped 
by  them. 

"Lastly  the  higher  standard  of  cultivation  will  bo  secured  by 
land — which  in  the  hands  of  a  proprietor  without  means  would 
necessarily  deturiurute  —  getting  into  the  hands  of  a  pro]irietur 
with  means,  and  therefore  able  to  make  the  best  of  it.  Without 
this  power  of  selling  portions  of  his  property,  the  proprietor  is  apt 
to  sink  deeper  and  deeper  into  debt,  and  In  proportion  as  he  doeb 
so  the  soil  Is  deprived  of  its  strength.  By  selling,  on  the  other 
hand,  he  becomes  free  of  debt  and  free  of  care,  and  obtains  the 
means  of  properly  cultivating  what  remains  to  him.  By  this  un- 
hindered movement  in  the  possession  of  land,  the  whole  of  the 
soil  remains  in  a  good  state  of  cultivation;  and  this  point  once 
attained,  increased  industry  and  exertion  will  make  it  possible  to 
attain  a  yet  higher  point;  whereas  a  backward  movement,  except 
as  the  result  of  extraordinary  mischances  from  without,  is  not  to 
be  apprehended. 

"  But  there  is  yet  another  advantage  springing  from  this  power 
of  piecemeal  alienation  which  is  well  worthy  of  attention,  and 
which  fills  our  paternal  heart  with  especial  gladness.  It  give.*, 
namely,  an  opportunity  to  the  so-called  small  folk  (kleine  Leute), 
cottiers,  gardeners,  boothmen,  and  day  laborers,  to  acquire  laudel 
property,  and  little  by  little  to  increase  it.  The  prospect  of  suet 
acquisition  will  render  this  numerous  and  useful  class  of  our  sub- 
jects industrious,  orderly,  and  saving,  inasmuch  as  thus  only  will 
they  be  enabled  to  obtain  the  means  necessary  to  the  purchased 
land.  Many  of  them  will  be  able  to  work  their  way  upwards,  ami 
to  acquire  property,  and  to  make  themselves  remarkable  for  their 
industry.  The  State  will  acquire  a  new  and  valuable  class  of  in- 
dustrious proprietors ;  by  the  endeavor  to  become  such,  agriculture 
will  obtain  new  hands,  and  by  increased  voluiitary  exertion,  more 
work  out  of  the  old  ones." 

The  edict  next  exacts  as  a  supplementary  measure  to  th«  | 
"  Edict  for  the  Regulation  of  the  Relations  between  Lonls 
of  the  Manor  and  their  Peasants,"  that  in  the  case  of  heredi 


!:!-li!i 


EDICTS  OF  STEIN  AND  HARDENBERG. 


107 


tary  leaseholds  (Erbpiichte)  tho  services  and  fines  may  be 
cuinumtod  into  rent-charges,  and  these  rent-charges  redeemed 
bv  a  capital  payment  calculated  at  four  per  cent. 

It  next  proceeds  to  deal  with  the  common  right%  of  the  peas- 
ants and  of  the  lords;  and  here  it  fairly  owns  its  inability  to 
carry  out  the  principle  of  the  free  owner  on  tho  free  soil. 
The  (Trent  mass  of  the  peasant  holdings  are  dispersed  in 
small,  open,  "commonable,"  intermixed  fields  over  the  area 
of  the  arable  mark ;  and  the  common  rights  of  pasturage  over 
the  arable  mark  necessarily  chain  down  tho  individual  culti- 
vator to  the  modes  of  cultivation  compatible  with  these  com- 
mon rjirhts.  To  disentangle  this  complicated  web  must  be 
the  work  of  time  and  of  special  legislation.  The  edict  there- 
fore announces  a  future  law  on  tho  subject,  and  for  the  pres- 
ent conlincs  itself  to  making  provisions  by  which  one  third 
part  of  sueh  "  commonable  "  fields  can  be  freed  from  the  com- 
mon rights  of  pasturage  and  placed  at  the  absolute  disposal 
of  individual  proprietors.  The  rights  of  pasturage  in  the 
forest  lands  of  the  manor  are  more  easily  disposed  of.  Tho 
advantageous  terms  on  which  full  rights  of  property  are 
obtainable  by  the  peasants  render  it  possible  to  make  strin- 
gent regulations  in  regard  to  the  exercise  of  those  rights, 
in  the  interest  of  the  landlord  and  for  the  preservation  of 
the  forests. 

To  guard  against  the  possibility  of  a  return  to  the  double 
ownersliip  system,  the  edict  lays  down  the  rule  that  though  a 
landed  proprietor  may  settle  laborers  on  his  estate,  and  pay 
for  their  services  in  land,  such  contracts  are  never  to  be 
made  for  more  than  twelve  years. 

The  edict  concludes  by  expressing  it  to  be  his  Majesty's 
wish  and  will  that  agricultural  societies  should  be  formed  in 
every  part  of  the  country  for  the  purpose  of  collecting  and 
diffusing  knowledge.  The  expenses  of  these  societies  and 
the  salaries  of  their  secretaries  will  be  paid  out  of  the 
exchequer,  and  the  societies  themselves  will  be  placed  in 
oommunieation  with  a  central  office  in  the  capital,  whose 
business  it  will  also  be  to  establish  and  maintain  model 
farms  in  various  parts  of  the  country  for  the  diffusion  of 


108 


ECONOMIC  HISTORY. 


agricultural  knowledge.  Besides  this  more  or  less  unofficial 
machinery,  provision  is  made  for  official  agricultural  buurds 
to  be  established  in  each  district;  but  these  arrangements, 
having  been  superseded  by  subsequent  legislation  need  nut 
be  referred  to. 

The  two  edicts  of  the  14th  of  September,  1811,  may  be 
considered  as  the  culminating  point  of  the  legislation  which 
goes  by  the  name  of  Stein  and  Uardenberg. 


Il:l 


'ii 


THE  ORDERS  IN  COUNCIL. 


109 


V. 


THE  ORDERS   IN  COUNCIL. 


Fkom  Levi's  History  or  British  Commkrck*  (2d  ed.),  pp.  101-113. 

THE  political  horizon  was  ominously  dark  at  the  com* 
mcncfMnent  of  the  nineteenth  century.     While  griev- 
ously sulToring  from  the  high  prices  of  corn  and  provisions 
and  opiiroaaed  by  the  burden  of  a  contest  already  sufficiently 
prolonged,  England  was  threatened  by  the  renewal  of  an- 
other armed  neutrality  on  the  part  of  the  Northern  powers, — 
a  neutrality  based  on  a  new  code  of  maritime  law  then 
deemed  utterly  inconsistent  with  the  rights  of  this  country. 
The  Northern  powers  wished  to  proclaim  that  free  ships 
should  make  free  goods ;  but  England  was  determined  that 
the  trade  of  the  enemy  should  not  be  carried  on  by  neutrals. 
The  Northern  powers  asserted  that  only  contraband  goods 
should  be  excluded  from  the  trade  of  neutrals,  and  these  of 
certain  definite  and  known  articles.     England  did  not  wish 
the  enemy  to  obtain  timber,  hemp,  and  other  articles,  which, 
though  not  contraband  of  war,  are  still  essential  for  warfare. 
The  Northern  powers  declared  that  no  blockade  should  be 
hi  1(1  valid  unless  real.     England  had  already  assumed  the 
right  to  treat  whole  coasts  as  blockaded  in  order  to  prevent 
I  the  enemy  receiving  supplies  from  any  quarter.     And  when 
the  Northern  powers  added  that  a  merchant  vessel  accompa- 
nied and  protected  by  a  belligerent  ship  ought  to  be  safe  from 
I  the  right  of  search,  England  was  not  prepared  to  recognize 
jthe  authority  of  such  ships,  and  would  place  no  limit  to  the 
|action  of  her  cruisers.    When,  therefore,  Russia,  Denmark, 
1  Sweden  entered  into  a  convention  to  enforce  the  princi- 

1  London :  John  Murray,  1880. 


IP  •' 


no 


ECONOMIC  HISTORY. 


pies  of  the  armed  neutrality,  and  in  pursuance  of  the  same 
Russia  caused  an  embargo  to  be  laid  on  all  British  vessels  in 
her  ports,  the  British  Government,  ill-disposed  to  bear  with 
such  provocation,  issued  a  proclamation  on  Jan.  14,  1801, 
authorizing  reprisals,  and  laying  an  embargo  on  all  Russian, 
Swedish,  and  Danish  vessels  in  British  ports.  What  fol- 
lowed is  well  known,  and  with  the  battle  of  Copenhagen 
the  Northern  confederacy  was  completely  dissolved.  By  this 
time  Mr.  Pitt  had  given  in  his  resignation,  and  a  change  of 
government  took  place,  which  led  to  a  change  of  policy 
towards  France,  and  to  negotiations  which  ended  with  the 
conclusion  of  the  treaty  of  Amiens.^ 

But,  alas !  from  whatever  cause  it  was,  that  peace  was  ol 
short  duration,  and  more  than  ever  the  patriotic  spirit  of  the 
people  was  evoked  to  defend  British  soil  against  Britain's 
inveterate  enemies. ^  From  class  to  class  the  national  enthu- 
siasm spread  and  increased,  and  even  the  merchants,  setting 
aside  their  books  and  business,  issued  a  declaration  promis- 
ing in  a  solemn  manner  to  use  every  exertion  to  rouse  the 
spirit  and  to  assist  the  resources  of  the  kingdom;  to  be  readj 
with  their  services  of  every  sort  and  on  every  occasion  in  its 
defence,  and  rather  to  perish  altogether  than  live  to  see  the 
honor  of  the  British  name  tarnished,  or  that  sublime  inheri- 
tance of  greatness,  glory,  and  liberty  destroyed,  which  de- 1 
Bcended  to  them  from  their  forefathers,  and  which  they  were 
determined  to  transmit  to  their  posterity.  Again  was  Mr. 
Pitt  called  to  be  prime  minister,  as  the  only  man  who  coulJ  | 
really  be  trusted  in  times  of  so  much  anxiety  and  peril  j 
And  then  it  was  that  that  continental  system  was  inaugu- 1 
rated  which  made  of  oceans  and  seas  one  vast  battle-field  c 
strife  and  bloodshed. 

Fully  to  understand  the  policy  of  this  country  as  regard! 

1  Peace  was  ratified  on  October  10,  1801;  and  the  treaty  of  Amiens  wii| 
concluded  March  26,  1802. 

2  On  May  16,  1803,  an  order  in  council  was  made,  issuing  letters  of  mat^ul 
and  reprisals  against  France,  and  anotlier  laying  an  embargo  on  all  shipit^l 
longing  to  the  French  and  Batavian  republics.  Reprisals  against  Spain '("I 
ordered  December  10,  1805;  against  Prussia  on  May  14,  1806,  and  agt 
Russia  on  December  18,  1807. 


i 


THE  ORDERS  IN  COUNCIL. 


Ill 


these  orders  in  council,  we  must  briefly  retrace  our  steps  by 
examining  the  measures  taken  in  previous  wars.    During  the 
Seven  Years'  War,  which  ended  in  1763,  France,  hemmed  in 
on  all  sides  by  England  and  hindered  by  the  British  naval 
force  from  carrying  on  any  trade  with  her  West  India  colo- 
nies, adopted  the  plan  of  relaxing  her  colonial  monopoly,  and 
allowing  neutral  ships  to  carry  the  produce  of  those  islands 
to  French  or  foreign  ports  in  Europe.     The  produce  being 
thus  carried  really  or  ostensibly  on  neutral  account,  it  was 
assumed  that  no  danger  of  capture  could  be  incurred.     But 
the  prize  courts  of  England  condemned  such  vessels  as  were 
captured  while  engaged  in  the  trade,  and  the  rule  was  then 
adopted,  called  the  rule  of  1756,i  that  a  neutral  has  no  right 
to  deliver  a  belligerent  from  the  pressure  of  his  enemy's 
hostilities  by  trading  with  his  colonies  in  time  of  war  in  a 
way  that  was  prohiinted  in  time  of  peace.     As  Sir  William 
t^cott  said,  "  The  general  rule  is  that  the  neutral  has  a  right 
to  carry  on  in  time  of  war  his  accustomed   trade  to  the 
utmost  extent  of  which  that  accustomed  trade  is  capable. 
Very  different  is  the  case  of  a  trade  which  the  neutral  has 
never  possessed ;  which  he  holds  by  no  title  of  use  and  habit 
in  time  of  peace;  and  which,  in  fact,  he  can  obtain  in  war 
by  no  other  title  than  by  the  success  of  the  one  belligerent 
against  the  other,  and  at  the  expense  of  that  very  belligerent 
under  whose  success  he  sets  up   his  title."      During  the 
American  war  this  principle  did  not  come  practically  into 
action,  hocause,  although  then  also  the  French  government 
iipened  the  ports  of  her  West  India  islands  to  the  ships  of 
neutral  powers,  it  had  the  wisdom  to  do  so  before  hostilities 
liiere  commenced,  and  not  after. 

In  accordance  with  these  principles,  when  the  war  of  the 
French  Revolution  commenced,   instructions  were  given  on 

'  The  rule  of  175C  Imd  been  acted  upon  even  by  France  on  previons  occa- 
i  «'on!  See  Note  1,  On  tlie  practice  of  the  British  Prize  Courts  with  regarl  to 
j  tlie  Colonial  trade  of  the  Enemy  during  tlie  American  War,  in  6  Kob  Rep. 

App,;  and  Cmskl^ration*  mir  /'Admission  fifs  Sai<irt$  neutrts  aur  Colouits  /ran- 
jf»'W  de.  rAmirnque  en  Tfms  <in  Guerre,  p.  13,  1779;  and  see  the  Wilhelmlna, 
M  Rol)  Rep.,  p.  4;  and  the  Inimanuel  Tudor  —Leading  Cast$  of  Mtnantilt 

Vp  814. 


112 


ECONOMIC  HISTORY. 


Nov.  6,  1793,  to  the  commanders  of  British  ships  of  war  and 
privateers,  ordering  them  "to  stop  and  detain  for  lawful 
adjudication  all  vessels  laden  with  goods,  the  produce  of  any 
French  colony,  or  carrying  provisions  or  other  supplies  for 
the  use  of  any  such  colony. "     And  this  order  was  the  more 
necessary  from  the  fact  that  American  ships  were  crowding 
the  ports  of  the  French  West  Indies,  where  the  flag  of  the 
United  States  was  made  to  protect  the  property  of  the  French 
planters.     Great  numbers  of  ships  under  American  colors 
were  thus  taken  in  the  West  Indies  and  condemned,  the 
fraudulent  pretences  of  neutral  property  in  the  cargoes  being 
too  gross  to  be  misunderstood.     Complaints  were,  however, 
made  of  the  hardships  of  this  practice  on  the  bona  jid( 
American  trader,   and  in  January,   1794,  the  instructions 
were  so  far  amended  that  the  direction  was  to  seize  "such 
vessels  as  were  laden  with  goods  the  produce  of  the  French 
West  India  Islands,  and  coming  directly  from  any  ports  of 
the  said  islands  to  Europe.'^    This  rule  continued  in  force 
till  1798,  when  again  it  was  relaxed  by  ordering  that  vessels 
should  be  seized  "  laden  with  the  produce  of  any  island  or 
settlement  of  France,  Spain,  or  Holland,   and  coming  di- 
rectly from  any  port  of  the  said  island  or  settlement  to  any 
port  in  Europe,  not  being  a  port  of  this  kingdom,  or  of  the 
country  to  which  the  vessel,  being  neutral,  should  belong." 
European  neutrals  were  thus  permitted  to  bring  the  produce 
of  the  hostile  colonies  from  thence  to  ports  of  their  own  coun- 
tries ;  and  European  or  American  neutral  ships  might  carry 
such  produce  direct  to  England.     But  when  the  war  was  re- 
sumed in  1803  the  rule  of  1798  was  again  put  in  force,  and 
instructions  were  given  "not  to  seize  any  neutral  vessels 
which  should  be  found  carrying  on  trade  directly  between 
the  colonies  of  the  enemy  and  the  neutral  country  to  whicli 
the  vessel  belonged,  and  laden  with  property  of  the  inhahi-j 
tants  of  such  neutral  country,  provided  that  such  neutral 
vessel  should  not  be  supplying  nor  should  have  on  the  out-  j 
ward  voyage  supplied  the  enemy  with  any  articles  of  contra- 
band of  war,  and  should  not  be  trading  with  any  bloc 
ports. " 


1 


THE  ORDERS  IN  COUNCIL. 


113 


By  tlms  allowing,  however,  neutrals  to  trade  safely  to  and 
from  neutral  ports,  means  were  opened  to  them  to  clear  out 
lor  a  neutral  port,  and  under  cover  of  that  pretended  desti- 
nation to  make  a  direct  voyage  from  the  colony  to  the  par- 
ent State,  or  really  to  proceed  to  some  neutral  country, 
ami  thence  re-export  the  cargo  in  the  same  or  a  different 
bottom  to  whichever  European  market,  neutral  or  hostile, 
they  might  prefer.  The  former,  on  an  assumed  voyage  to 
the  parent  State,  being  the  shortest  and  most  convenient 
metliod,  was  chiefly  adopted  by  the  Dutch  on  their  homeward 
voyages,  because  a  pretended  destination  for  Prussian,  Swed- 
ish, or  Danish  ports  in  the  North  Sea  or  the  Baltic  was  a 
plausible  mask,  even  in  the  very  closest  approach  the  ship 
luigiit  make  to  the  Dutch  coast  down  to  the  moment  of  her 
slipping  into  port.  The  latter  method,  or  the  stopping  at  an 
intermediate  neutral  country  was  commonly  preferred  by  the 
Spaniards  and  French  in  bringing  home  their  colonial  pro- 
duce, because  uo  pretended  neutral  destination  could  be  given 
that  would  consist  with  the  geographical  position  and  course 
of  a  sliip  coining  directly  from  the  West  Indies,  if  met  with 
near  the  end  of  her  voyage  in  the  latitude  of  their  principal 
ports.  The  American  flag  in  particular  was  a  cover  that 
could  scarcely  ever  be  adapted  to  the  former  method  of  elud- 
ing our  hostilities,  but  it  was  found  peculiarly  convenient  in 
the  latter.  Such  is  the  position  of  the  United  States,  and 
such  was  the  effect  of  the  trade-winds  that  European  vessels, 
homeward  bound  from  the  West  Indies,  could  touch  at  their 
ports  with  very  little  inconvenience  or  delay ;  and  such  was 
also  the  case,  though  in  a  less  degree  with  regard  to  vessels 
iMiuing  from  the  remotest  parts  of  South  America  or  the 
List  Indies.  The  passage  from  the  Gulf  of  Mexico,  espe- 
cially, ru-  so  close  along  the  North  American  shore  that 
ships  bound  from  the  Havannah,  from  V'^ra  Cruz,  and  other 
mat  Spanish  ports  bordering  on  that  gulf  to  Europe  could 
touch  at  certain  ports  in  the  United  States  with  scarcely 
any  deviation.  On  an  outward  voyage  to  the  East  and  West 
Indies  the  proper  course  would  be  more  to  the  southward 
than  would  well  consist  with  touching  on  North  America ; 


114 


ECONOMIC  HISTORY. 


yet  the  deviation  for  that  purpose  was  not  a  very  formidable 
inconvenience.     Fi'om  these  causes  the  protection  given  bv 
the  American  flag  to  the  intercourse  between  our  European 
enemies  and  their  colonies  was  chiefly  in  the  way  of  a  double 
voyage,  in  which  America  was  the  half-way  house  or  central 
point  of  communication.     The  fabrics  and  commodities  of 
France,  Spain,  and  Holland  were  brought  under  American 
colors  to  ports  in  the  United  States,  and  from  thence  re- 
exported under  the  same  flag  for  the  supply  of  the  hostile 
colonies.     Again,  the  produce  of  these  colonies  was  brought 
in  a  like  manner  to  the  American  ports  and  thence  reshippcd 
to   Europe.     But   the  Americans   went  still   farther.    The 
ports  of  this  kingdom  having  been  constituted  by  the  royal 
instructions  of  1798,   legitimate   places  of  destinr.tion  for 
neutrals  coming  with  cargoes  of  produce  directly  from  the 
hostile  colonics,  the  American  merchants  made  a  pretended 
destination  to  British  ports  a  convenient  cover  for  a  voyage 
from  the  hostile  colonies  to  Europe,  which  their  flag  could 
not  otherwise  give,  and   thus  rivalled  the  neutrals  of  the  old 
world  in  this  method  of  protecting  the  West  India  trade  of 
the  enemy,  while  they  nearly  engrossed  the  other.     As  the 
war  advanced,  after  the  Peace  of  Amiens,  the  neutrals  be- 
came bolder  and   more   aggressive.     American   ships  were 
constantly  arriving  at  Dutch  and  French  ports  with  sugar, 
cofTee,   and  other  productions  of  the  French  and   Spanish 
West  Indies.     And  East  India  goods  were  imported  by  them 
into  Spain,  Holland,  and  France. 

By  these  and  other  means  Hamburgh,  Altona,  Emdcn, 
Gottenburgh,  Copenhagen,  Lisbon,  and  other  neutral  mar- 
kets were  glultcd  with  the  produce  of  the  West  Indies  and 
the  fabrics  of  the  East,  brought  from  the  prosperous  colonies 
of  powers  hostile  to  this  country.  By  the  rivers  and  canals 
of  Germany  and  Flanders  these  were  floated  into  the  ware- 
houses of  the  enemy  or  circulated  for  the  supply  of  his  cus- 
tomers in  neutral  countries.  He  rivalled  the  British  planter 
and  merchant  throughout  the  continent  of  Europe,  and  in 
all  ports  of  the  Mediterranean,  and  even  supplnnted  the 
manufacturers  of  Manchester,  Birmingham,  and  Yorkshire, 


THE  ORDERS  IN  COUNCIL. 


115 


i 


4 


nnil  h\'  these  means  the  hostile  colonies  derived  benefit,  and 
not  iaeonvenience,  from  the  enmity  of  Great  Britain.    What 
moreover,  especially  injured  the  commerce  of  this  country 
was  the  increase  in  the  cost  of  importation  into  this  country 
from  the  British  colonies,  from  freight,  insurance,  and  other 
charges,  which  taken  together  were  as  much  as,  if  not  supe- 
rior to,  those  to  which  the  enemy  was  subjected  in  his  covert 
and  circuitous  trade.     It  was  a  general  complaint,  therefore, 
that  tlic  enemy  carried  on  colonial  commerce  under  the 
neutral  flag  cheaply,  as  well  as  safely;  that  he  was  enabled 
not  only  to  elude   our  hostilities,  but  to   rival   our  mer- 
chants and  planters  in  the  European  markets;  that  by  the 
same  means  the  hostile  treasuries  were  filled  with  a  copious 
stream  of  revenue;   and  that  by  this  licentious  use  of  the 
neutral  flag,  the  enemy  was  enabled  to  employ  his  whole 
military  marine  for  purposes  of  offensive  war,  without  being 
oliliged  to  maintain  a  squadron  or  a  ship  for  the  defence  of 
his  colonial  ports.     It  was,  moreover,  contended  that,  since 
neutral  States  have  no  right,  but  through  our  own  gratuitous 
concession,  to  carry  on  the  colonial  trade  of  the  enemy,  we 
might  after  a  reasonable  notice  withdraw  that  ruinous  in- 
dulgence ;  that  tho  neutral  did  not  require  such  principles ; 
that  the  comparative  cheapness  of  his  navigation  gives  him 
in  every  open  market  a  decisive  advantage ;  that  in  the  com- 
merce of  other  neutral  countries  he  could  not  fail   to  sup- 
jilant  the  belligerent;  and  that  he  obtained  an  increase  of 
trade  by  purchasing  from  one  belligerent  and  selling  to  his 
enemies  the  merchandise  for  which,  in  time  of  peace,  they 
dejiendcd  on  each  other. 

Such  complaints  made  against  neutral  States  found  a  pow- 
erful echo  by  the  publication  of  a  work  entitled  "  War  in 
Disguise  and  the  Frauds  of  the  Neutral  Flag, "  supposed  to 
j  have  l)een  written  by  Mr.  James  Stephen,  the  real  author  of 
I  the  orders  in  council.     The  British  government  did  not  see 
I  its  way  at  once  to  proceed  in  the  direction  of  prohibiting  to 
j  neutral  ships  the  colonial  trade,  which  they  had  enjoyed  for 
la  considerable  time;  but  the  first  step  was  taken  to  paralyze 
the  resources  of  the  enemy,  and  to  restrict  the  trade  of  neu- 


116 


ECONOMIC  HISTORY. 


trals  by  the  issue  of  an  order  in  council  in  May,  1806,  de- 
claring that  all  the  coasts,  ports,  and  rivers  from  the  Elbe  to 
Brest  should  be  considered  blockaded,  though  the  only  por- 
tion of  those  coasts  rigorously  blockaded  was  that  included 
between  Ostend  and  the  mouth  of  the  Seine,  in  the  ports  of 
which  preparations  were  made  for  the  invasion  of  England. 
The  northern  ports  of  Germany  and  Holland  were  left  partly 
open,  and  the  navigation  of  the  Baltic  altogether  free. 

Napoleon,  then  in  the  zenith  of  his  power,  saw  in  this  order 
in  council  a  fresh  act  of  wantonness,  and  he  met  it  by  the  is- 
sue of  the  Berlin  decree  of  Nov.  21, 1806.    In  that  document, 
remarkable  for  its  boldness  and  vigor.  Napoleon  charged  Eng- 
land with  having  set  at  naught  the  dictates  of  international 
law,  with  having  made  prisoners-of-war  of  private  individu- 
als, and  with  having  taken  the  crews  out  of  merchant  ships, 
He  charged  this  country  with  having  captured  private  prop- 
erty at  sea,  extended  to  commercial  ports  the  restrictions 
of  blockade  applicable  only  to  fortified  places,  declared  as 
blockaded  places  which  were  not  invested  by  naval  forces, 
and  abused  the  right  of  blockade  in  order  to  benefit  her  own 
trade  at  the  expense  of  the  commerce  of  continental  States. 
He  asserted  the  right  of  combating  the  enemy  with  the  same 
arms  used  against  himself,  especially  when  such  enemy  ig- 
noi'cd  all  ideas  of  justice,  and  every  liberal  sentiment  which 
civilization  imposes.     He  announced  his  resolution  to  apply 
to  England  the  same  usages  which  she  had  established  in  her 
maritime  legislation.     He  laid  down  the  principles  which 
France  was  resolved  to  act  upon  until  England  should  rccog- 
nl/n  that  the  rights  of  war  are  the  same  on  land  as  on  sea, 
li -'♦  such  rights  should  not  be  extended  either  against  pri- 
viite  proiierty  or  against  persons  not  belonging  to  the  mili- 
thXY  or  iiHval  forces,  and  that  the  right  of  blockade  should 
bo  rostrictcd  to  fortified  places  truly  invested  by  sufficient 
forcci^.      And  upon  these  premises  the  decree  ordered:  1st 
that  the  British  islands  should  be  declared  in  a  state  of 
blockade ;  2d,  that  all  commerce  and  correspondence  with 
the  British  islands  should  be  prohibited,   and  that  letters  i 
addressed  to  England  or  Englishmen  written  in  the  Englisr 


rii: 


"         -a; 


'1 


THE  ORDERS  IN  COUNCIL. 


117 


language  should  be  detained  and  taken ;  3d,  that  every  Brit- 
ish subject  found  in  a  country  occupied  by  French  troops  or 
1)V  tliose  of  their  allies  should  be  made  a  prisoner-of-war; 
4th,  tliat  all  merchandise  and  property  belonging  to  British 
subjects  should  be  deemed  a  good  prize ;  5th,  that  all  com- 
merce in  English  merchandise  should  be  prohibited,  and 
that  all  merchandise  belonging  to  England  or  her  colonies, 
and  of  British  manufacture,  should  be  deemed  a  good  prize ; 
and  (3th,  that  no  vessel  coming  direct  from  England  or  her 
colonies  be  allowed  to  enter  any  French  port  or  any  port 
subject  to  French  authority ;  and  that  every  vessel  which,  by 
moans  of  a  false  declaration,  should  evade  such  regulations 
should  at  once  be  captured. 

The  British  government  lost  no  time  in  retaliating  against 
France  for  so  bold  a  course;  and  on  Jan.  7,  1807,  an  order 
in  council  was  issued,  which,  after  reference  to  the  orders 
issued  by  France,  enjoined  that  no  vessel  should  be  allowed 
to  trade  from  one  enemy's  port  to  another,  or  from  one  port 
to  another  of  a  French  ally's  coast  shut  against  English  ves- 
sels; and  ordered  the  commanders  of  the  ships  of  war  and  pri- 
vateers to  warn  every  neutral  vessel  coming  from  any  such 
port,  and  destined  to  another  such  port,  to  discontinue  her 
voyage,  and  that  any  vessel,  after  being  so  warned  which 
should  be  found  proceeding  to  another  such  port  should  be 
captured  and  considered  as  lawful  prize.    This  order  in  coun- 
cil having  reached   Napoleon  at  Warsaw,  he  immediately 
Midercd  the  confiscation  of  all  English  merchandise  and  co- 
1  mial  produce  found  in  the  Hanseatic  Towns.     Bourriennc, 
Napoleon's  commissioner  at  Hamburg,  declared  that  all  who 
carried  on  trade  with  England  supported  England;  that  it 
'vas  to  prevent  such  trading  that  France  took  possession  of 
Hamburg;  that  all  English  goods  should  be  produced  by  the 
Hamburghcrs  for  the  purpose  of  being  confiscated ;  and  that 
in  forty-eight  hours,  domiciliary  visits  would  be  paid  and 
j  military  punishments   inflicted  on  the  disobedient.      But 
:  Britain  in  return  went  a  step  further,  and  by  order  in  coun- 
cil, Nov.  11, 1807,  declared  all  the  ports  and  places  of  France, 
and  those  of  her  allies  and  of  all  countries  where  the  English 


m 


118 


ECONOMIC  HISTORY. 


flag  was  excluded,  even  though  they  were  not  at  war  with 
Britain,  should  be  placed  under  the  same  restrictions  for  com- 
merce and  navigation  as  if  they  were  blockaded ;  and  conse- 
quently that  ships  destined  to  those  ports  should  be  lialtleto 
the  visit  of  British  cruisers  at  a  British  station,  and  there 
subjected  to  a  tax  to  be  inijwsed  by  the  British  Parliament.' 
Napoleon  was  at  Milan  when  this  order  in  council  was 
issued,  and  forthwith,  on  December  17,  the  famous  decree 
appeared  by  which  he  iiuijosod  on  neutrals  just  the  contrary 
of  what  was  j)re8cribed  to  them  by  England,  and  further  di- 
Glared  that  every  vessel,  of  whatever  nation,  that  submitted 
to  the  order  in  council  of  November  11  should  by  that  very 
act  become  denationalized,  considered  as  British  property, 
and  condemned  as  a  good  prize.  The  decree  placed  tlie  Brit- 
ish islands  in  a  state  of  blockade,  and  ordered  that  every 
shii),  of  whatever  nation,  and  with  whatever  cargo,  piocefd- 
ing  from  English  ports  or  English  colonies  to  cotmtries 
occupied  by  English  troops,  or  going  to  England,  should  be  a 
good  prize.  This  England  answered  by  the  order  in  council 
of  April  2G,  1809,  which  revoked  the  order  of  1807  as  re- 
gards America,  but  confirmed  the  blockade  of  all  the  ports 
of  France  and  Holland,  their  colonics  and  dcpcmleneies, 
And  then  France,  still  further  incensed  against  Eusiland. 
issued  the  tariff  of  Trianon,  dated  Aug  5,  1810,  completed  liy 
the  diHM'ce  of  St.  Cloud  of  September  12  and  of  Fontainebleaii 
of  October  19,  which  went  the  length  of  ordering  the  seizure 
and  burning  of  all  British  goods  found  in  France,  Gerniany, 

1  One  of  the  fruits  of  the  great  blockade  was  the  iiitroduution  of  lieetroot 
sugar.  In  1810,  the  price  of  sugar  being  very  high,  experimi'iiis  wno  iimileto 
make  sugar  from  the  beet-root,  and  the  results  were  encouraging.  In  1811  ami 
1812  the  Government  put  at  the  disposal  of  the  Minister  of  Agriculture  10*1,000 
arponts  of  land  and  l.OOO.OOOf.,  as  well  as  the  exemption  from  all  taxe>oii 
native  sugar,  and  works  for  the  purpose  were  constructed  all  over  the  country. 
But  as  soon  as  the  blockade  was  removed  native  sugar  cotild  no  longer  com- 
pete with  foreign  sugar,  and  most  of  the  works  were  abandoned.  In  1^'- 
Benjamin  Delessert  found  the  way  of  making  the  grains  of  beet-root  sugar  as 
fine  as  those  of  cane  sugar.  And  Vilinorin  was  able  to  make  a  kind  of  while 
beet-root  very  nearly  as  rich  as  the  beet-root  of  Silesia.  In  1829  tiiere »« 
100  sugar  factories,  which  produced  6,000,000  kilos  of  sugar.  In  18.^2  !«;*' 
production  was  double.  In  1837  there  were  4-30  sugnr  works,  and  now  tlieW' 
root  enters  largely  in  the  sugar  industry  all  over  the  Continent. 


THE  ORDERS  IN  COUNCIL. 


119 


Holland,  Italy,  Spain,  and  in  every  place  occupied  by  French 
truDps.  Sti'iingc  infatuation!  and  how  many  States  took 
part  in  this  mad  act  of  vindictivenesa!  The  princes  of  the 
Rhcnisli  Cunl't'dcration  hastened  to  execute  it,  some  for  the 
purposi'  of  enriching  themselves  by  the  wicked  deed,  some 
out  of  hatred  towards  the  English,  and  some  to  snow  their 
devotion  towards  their  master.  From  Carlsruhe  to  Munich, 
from  Cassol  to  Dresden  and  Hamburg,  everywhere,  bonfires 
were  made  of  English  goods.  And  so  exacting  were  the 
French  tluit  when  Frankfort  exhibited  the  least  hesitation  in 
earrj  inu;  out  the  decree  French  troops  were  sent  to  execute 
the  order. 

By  means  such  as  these  the  commerce  of  the  world  was 
irreatly  deranged,  if  not  destroyed  altogether;  and  none  suf- 
fered more  from  it  than  England  herself.     Was  it  not  enough 
to  be  eflcctually  shut  out  from  all  commerce  with  French 
ports,  that  we  should  have  provoked  the  closing  of  neutral 
ports  also  ?    Was  it  politic,  at  a  time  when  our  relations  with 
the  principal  powers  were  in  a  condition  so  critical,  to  alien- 
ate from  us  all  the  neutral  States  of  Europe  ?     Was  it  wise 
to  indict  so  grievous  an  injury  upon  neutral  States,  as  to 
force  them  to  make  common  cause  with  the  enemy  ?     It  is 
scarcely  |)ossible  to  describe  at  what  peril  the  commerce  of 
the  world  was  carried  on.     The  proceedings  of  the  Court  of 
Admiralty  are  full  of  the  most  romantic  incidents.      An 
American  sliip'  with  a  cargo  of  tobacco  was  sent  from  Amer- 
ica to  Viiio,  or  to  a  market  for  sale.     At  Vigo  the  tobacco 
was  sold  under  contract  to  deliver  it  at  Seville  at  the  master's 
risk,  and  the  vessel  was  going  to  Seville  to  deliver  the  cargo 
when  she  was  captured.     A  British  vessel  ^  was  separated 
from  her  convoy  during  a  storm  and  brought  out  by  a  French 
lugger  wliich  came  up  and  told  the  master  to  stay  by  her  till 
[  the  storm  moderated  when  they  would  send  a  boat  on  board. 
[The  lu<r<rer  continued  alongside  sometimes  ahead  and  some- 
times astern  and  sometimes  to  windward  for  three  or  four 
[liours.    But  a  British  frigate  coming  in  sight  gave  chase  to 

'  The  "  Atlas,"  3  Rob.  Rep.,  p.  209. 

2  The  "Edward  and  Mary,"  3  Rob.  Rep.,  p.  305. 


120 


ECONOMIC  HISTORY. 


the  lugger  and  captured  her,  during  which  time  the  ship 
made  her  escape,  rejoined  the  convoy  and  came  into  Poole. 
Ships  were  taicen  because  they  were  sailing  to  false  destina- 
tions inider  false  papers,  false  flags,  false  certificates  of 
ownership,  and  false  bills  of  bale.  They  were  seized  for 
running  the  blockade,  and  for  escaping  from  blockaded  ports. 
They  were  arrested  for  carrying  despatches,  military  men, 
and  contraband  of  war.  In  every  way,  at  every  point  of  the 
ocean,  the  pursuit  was  carried  on,  till  the  seas  were  cleared  of 
merchant  ships,  and  the  highway  of  nations,  the  wwUst  and 
freest  arena  for  trade,  was  converted  into  an  amphitheatre 
for  the  display  of  the  wildest  and  worst  excesses  of  human 
cupidity  and  passions. 

But  a  greater  evil  than  even  this  extreme  derangement  of 
maritime  commerce  was  that  which  flowed  from  the  system 
of  licenses,'  an  evil  which  undermined  the  first  principles  of 
commercial  morality.  It  was  forcibly  stated  by  the  Marquis 
of  Lansdowne  that  the  commerce  of  the  country  wns  one 
mass  of  simulation  and  dissimulation;  that  our  traders  crept 
along  the  shores  of  the  enemy  in  darkness  and  silence,  wait- 
ing for  an  opportunity  of  carrying  into  effect  the  simulative 
means  by  which  they  sought  to  carry  on  their  business ;  that 
such  a  system  led  to  private  violation  of  morality  and  honor 
of  the  most  alarming  description ;  and  that  instead  of  bene- 
fiting our  commerce,  manufactures,  and  resources,  the  orders 
in  council  diminished  our  commerce,  distressed  our  manu- 
factures, and  lessened  our  resources.  Yet  all  these  warninfrs 
and  expostulations  were  unheeded.  The  national  mind  was 
preoccupied  by  the  one  thought  of  compelling  France  and  her 
military  leader  to  a  complete  submission;  and  no  considera- 
tion of  a  commercial  or  pecuniary  character,  no  regard  to  the 
bearing  of  her  measures  upon  other  countries  were  sufficient 
to  induce  a  reversal  of  this  military  and  naval  policy. 

Upwards  of  fifteen  years  had  elapsed  since  the  first  shot 
was  fired  between  England  and  France  after  the  great  reroiu 

'  The  number  of  commercial  licenses  granted  for  imports  and  export! «' 
68  in  1802,  836  in  ISM,  1.141  in  1804,  701  in  1806,  1,620  in  1806,  2,006  in  W" 
4.910  in  1808,  16,226  in  1809,  18,350  In  1810,  and  7,602  in  1811 


THE  ORDERS  IN  COUNCIL. 


121 


tion,  and  yet  the  two  nations  were  as  intent  as  ever  on 
securiniL'  their  mutual  destruction.  England  had  indeed 
learned  liy  this  time  to  make  light  of  all  such  decrees,  and 
she  had  found  by  experience  that  British  goods  found  their 
way  to  the  Continent  in  spite  of  all  vindictive  measures. 
But  the  attitude  of  the  United  States  became  more  and  more 
threatening,  and  the  nations  saw  an  absolute  necessity  for 
revising  the  policy  of  the  orders  in  council.  For  years  past 
Lord  Temple,  Lord  Castlereagh,  Mr.  Perceval,  and  Sir  John 
Nlehols  had  brought  the  subject  before  the  House,  and  many 
a  long  discussion  had  taken  place  on  the  subject.  In  their 
opinion  this  country  had,  without  any  alleged  provocation 
from  the  United  States  of  America,  interrupted  nearly  the 
whole  of  their  commerce  with  Europe,  and  they  held  that 
Buch  orders  in  council  were  unjust  and  impolitic,  and  that 
the  issuing  of  them  at  the  time  and  under  the  circumstances 
was  an  act  of  the  utmost  improvidence  and  rashness.  Yet 
the  nation  was  disposed  to  be  guided  by  the  government ;  and 
when  Lord  Grenville  moved  resolutions  of  similar  import  in 
1809  he  met  with  no  better  response.  When,  however,  the 
United  States,  after  having  passed  the  Non-intercourse  Act, 
proceeded  still  further  in  the  way  of  preparation  for  open 
hostilities,  the  merchants  began  to  speak  their  mind  on  the 
subject;  and  from  London,  Hull,  Bristol,  and  all  the  chief 
ports  petitions  came  to  the  legislature  praying  for  the  revoca- 
tion of  the  obnoxious  orders.  The  merchants  of  London 
represented  that  trade  was  in  a  miserable  condition,  chiefly 
from  the  want  of  the  customary  intercourse  with  the  conti- 
nent of  Europe ;  that  employment  was  very  scarce,  and  the 
waires  of  labor  very  low ;  that  the  aspect  of  affairs  threatened 
additional  suffering  to  those  then  experienced ;  that  since  all 
the  evils  then  suffered  were  owing  to  the  continuance  of  the 
^ar,  it  was  all-important  to  obtain  if  possible  an  early  res- 
toration of  the  blessings  of  peace ;  that  it  was  not  from  any 
dread  of  the  enemy  that  they  made  such  a  request,  but  from 
a  desire  that  no  opportunity  might  be  lost  of  entering  into 
negotiations  for  the  purpose;  that  in  their  opinion  it  was  a 
great  error  to  suppose  that  the  policy  of  the  orders  of  the 


122 


ECONOMIC  HISTORY. 


council  could  in  any  way  be  beneficial  to  trade;  but  that,  on 
the  contrary,  they  regarded  with  extreme  anprcheuBlon  its 
effect  on  our  relations  with  the  United  States  of  Anicrictt. 
The  merchants  of  UuU  complained  that  the  Hystem  of  liceiiHc 
sapped  public  morals;  those  of  Bristol  represented  that  they 
suffered  intensely  in  their  general  trade;  and  riots  occurred 
in  Lancashire,  Yorkshire,  and  Cheshire. 

On  April  28,  1812,  the  House  of  Commons  agreed  without 
a  division  to  he;.r  evidence  in  support  of  these  petitions;  uml 
on  June  1(3  Mr.,  afterwai'ds  Lord,   Brougham  moved  "Tliat 
an  huml)le  address  be  presented  to  his  Royal  Ilighntss  tlie 
Prince  Regent,  representing  to  his  Royal  Highness  that  this 
House  has  for  some  time  past  been  engaged  in  an  iiKiuiry 
into  the  present  depressed  state  of  the  manufactures  ami 
commerce  of  the  country,  and  the  effects  of  the  orikrs  in 
council  issued  by  his  Majesty  in  the  years  1807  and  180!'; 
assuring  his  Royal  Highness  that  this  House  will  at  all  times 
supjjort  his  Royal  Highness  to  the  utmost  of  its  powers,  in 
maintaining  those  just  maritime  rights  which  have  essen- 
tially contributed  to  the  j)rosperity  and  honor  of  the  realm; 
but  beseeching  his  Royal  Highness  that  he  would  be  gracioiislv 
pleased  to  recall  or  suspend  the  said  orders,  and  to  adojit  siieli 
measures  as  may  tend  to  conciliate  neutral  powers  without 
sacrificing  the  right  and  dignity  of  his  Majesty's  crown."   In 
the  most  graphic  manner  Lord  Brougham  depicted  tlie  dis- 
tress of  the  country,  showed  how  erroneous  was  the  idea  that 
what  we  lost  in  the  European  trade  we  gained  in  any  other 
quarter,  and  warned  the  country  of  the  certainty  of  a  war  with 
America  if  the  orders  were  not  at  once  rescinded.     "  I  know," 
he  said,  "  I  shall  be  asked  whether  I  would  recommend  any 
sacrifice  for  the  mere  purpose  of  conciliating  America.    I  rec- 
ommend no  sacrifice  of  honor  for  that  or  for  any  purpose;  but 
I  will  tell  you  that  I  think  we  can  well  and  safely  for  our 
honor  afford  to  conciliate  America.     Never  did  we  stand  so 
high  since  we  were  a  nation  in  point  of  military  character, 
We  have  it  in  abundance  and  even  to  spare.     This  unhappy 
and  seemingly  interminable  war,  lavish  as  it  has  been  in 
treasure,  still  more  profuse  of  blood  and  barren  of  real  ad- 


II    ■ 


THE  ORDERS  IN  COUNCIL, 


128 


vantnjro,  lias  ut  loast  been  equally  lavish  of  glory.  Its  feats 
Imve  not  merely  sustained  the  warlike  fume  of  the  nation, 
wliicli  would  have  been  much;  they  have  done  what  seemed 
scarcely  possible, — they  have  greatly  exulted  it.  They  have 
oovcri'l  our  arms  with  immortal  renown.  Then,  I  say,  use 
this  priory,  — use  this  proud  height  on  which  we  now  stand, 
for  the  purpose  of  peace  and  conciliation  with  America.  Let 
this  and  its  incalculable  benefits  be  the  advantage  which  wo 
rciip  from  the  war  in  Europe,  for  the  fame  of  that  war  enables 
us  safely  to  take  it.  And  who,  I  demand,  give  the  most  dis- 
graceful counsels, —  they  who  tell  you  we  are  in  military  char- 
acter lint  of  yesterday,  we  yet  have  a  name  to  win,  we  stand 
on  'lonlitful  ground,  wo  dare  not  do  as  we  list  for  fear  of  be- 
in'j  th(in<rht  afraid,  we  cannot  without  loss  of  name  stoop  to 
|ia('ify  our  American  kinsmen  ?  or  I,  who  say  we  are  a  great, 
a  proud,  a  warlike  peojde;  we  have  fought  everywhere  and 
confiuored  wherever  we  have  fought;  our  character  is  eter- 
nally fixed ;  it  stands  too  firm  to  be  shaken,  and  on  the  faith 
of  it  we  may  do  towards  America  safely  for  our  honor  that 
which  we  know  our  interests  require  ?  This  perpetual  jeal- 
ousy of  America!  Good  God !  I  cannot  with  temper  ask  on 
what  it  rests  I  It  drives  me  to  a  passion  to  think  of  it! 
Jealousy  of  America!  I  should  as  soon  think  of  being  jeal- 
ous of  the  tradesman  who  supplies  me  with  necessaries,  or 
the  client  who  entrusts  his  suits  to  my  patronage.  Jealousy 
of  America!  whose  armies  are  as  yet  at  the  plough,  or  mak- 
iiiff,  since  your  policy  has  willed  it,  so  awkward  (though  im- 
lirovinjr) attempts  at  the  loom;  whose  assembled  navies  could 
not  lay  siege  to  an  English  harbor!  Jealousy  of  a  power 
which  is  necessarily  peaceful  as  well  as  weak,  but  which  if 
it  had  all  the  ambition  of  France  and  her  armies  to  back  it, 
and  all  the  navy  of  England  to  boot, —  nay,  had  it  the  lust  of 
conquest  which  marks  your  enemies,  and  your  own  army  as 
Tell  as  navy  to  gratify  it,  —  is  placed  at  so  vast  a  distance  as 
to  be  perfectly  harmless !  And  this  is  the  nation  of  which 
for  our  honor's  sake  we  are  desired  to  cherish  a  perpetual 
jealousy  for  the  ruin  of  our  best  interests!  I  trust,  sir,  that 
no  such  phantom  of  the  brain  will  scare  us  from  the  path  of 


124 


ECONOMIC  HISTORY. 


|{# 


our  duty.  The  advice  which  I  tender  is  not  the  same  which 
has  at  all  times  been  offered  to  this  country.  There  is  one 
memorable  era  in  our  history  when  other  uses  were  made  of 
our  triumphs  from  those  which  I  recommend.  By  the  treaty 
of  Utrecht,  which  the  reprobation  of  ages  has  left  inade- 
quately censured,  we  were  content  to  obtain,  as  the  whole 
price  of  Ramillies  and  Blenheim,  an  additional  share  of  the 
accursed  slave  trade.  I  give  you  other  counsels.  I  should 
have  you  employ  the  glory  which  you  have  won  at  Talavera 
and  Corunna  in  restoring  your  commerce  to  its  lawful,  open, 
honest  course,  and  rescue  it  from  the  mean  and  hateful 
channels  in  which  it  has  lately  been  confined.  And  if 
any  thoughtless  boaster  in  America  or  elsewhere  should 
vaunt  that  >ou  have  yielded  through  fear,  I  would  not  bid 
him  wait  until  some  new  achievement  of  our  arms  put  him 
to  silence,  but  I  would  counsel  you  in  silence  to  disregard 
him." 

The  effect  of  such  an  appeal  was  fatal  to  the  whole  system. 
The  government  saw  that  resistance  was  no  longer  possible, 
and  on  April  21  the  Prince  Regent  made  a  declaration  that 
the  orders  in  council  would  be  revoked  as  soon  as  the  Berlin 
and  Milan  decrees  should  be  repealed.  But  it  was  too  late, 
America  had  by  this  time  ceased  to  maintain  a  neutral  atti- 
tude. And  having  made  a  secret  treaty  with  Napoleon,  she 
issued  an  embargo  on  all  British  vessels  in  American  ports. 
declared  war  against  England,  and  proceeded  to  make  an  in- 
effectual attack  upon  Canada.  The  political  condition  of 
Europe,  however,  at  this  stage  happily  assumed  a  brighter 
aspect.  The  long-desired  peace  began  to  dawn  on  the  hori- 
zon, and  in  rapid  succession  the  news  came  of  the  battle  of 
Leipzig,  the  entry  of  the  Allies  into  Paris,  and  the  abdication 
of  Bonaparte.  Negotiations  then  commenced  in  earnest,  and 
they  issued  in  the  treaty  of  peace  and  Congress  of  Vienna. 
which  once  more  restored  order  and  symmetry  in  the  politi 
cal  organization  of  Europe.  ^    On  Dec.  24,  1814,  a  treaty  of 

»  The  total  cost  of  the  war  with  France,  from  1798  to  1816  (the  war  expen- 
diture continued  till  1817),  was  £881,446,449.  The  national  debt,  which,  in 
1793,  amounted  to  £247,874,4-34,  rose  in  1815  to  £861,000,049. 


THE  ORDERS  IN  COUNCIL. 


125 


peace  was  signed  between  the  United  Kingdom  and  the 
United  States.  On  June  9,  1815,*  the  principal  act  of  the 
Congress  of  Vienna  was  signed,  which  established  the  future 
political  relations  of  the  European  States,  and  laid  down  the 
regulations  for  the  free  navigation  of  rivers.  And  on  July 
27  of  the  same  /ear  a  Treaty  of  Commerce  was  concluded 
between  Great  Britain  and  the  United  States  of  America. 

1  The  treaties  of  Vienna  had  tc  deal  with  the  financial  as  well  as  with  the 
political  condition  of  States.  By  agreement  dated  August  10,  1815,  France  be- 
came bniind  to  pay  185,840,130f.  to  the  Allied  Powers  for  the  maintenance  of 
the  l,13o,llOO  men,  tlie  army  of  occupation.  And  by  the  treaty  of  November 
15,  France  undertook  to  pay  700,000,000f .  to  the  Allied  Powers  as  war  contribu- 
tion, to  pay  all  legitimate  debts,  and  also  the  expense  of  occupation  of  150,000 
men  for  five  years.  Numerous  claims  were,  moreover,  made  by  the  Banks  of 
Hamburg,  Amsterdam,  Genoa,  the  Swiss  bankers,  and  many  merchants  for 
losses  and  destruction  of  their  property,  amounting  in  all  to  2,700,000,000f.,  and 
all  these  claims  were  settled  by  means  of  loans  contracted  with  the  banking 
houses  of  Baring  and  Hope.' 


126 


ECONOMIC  HISTORY. 


VI. 


THE  FINANCES  OF  ENGLAND,  1793-1815. 

From  Pobter's  Progress  of  the  Nation,*  Section  IV. 

CHAPTER  L 

TN  order  to  give  an  intelligible  account  of  the  financial 
•^  state  of  the  kingdom  at  the  beginning  of  the  present 
century,  it  is  necessary  to  explain  briefly  the  system  which 
had  been  brought  into  operation  by  Mr.  Pitt  during  the  pre- 
ceding three  years. 

In  November,  1797,  that  minister  had  recourse  to  what  he 
was  pleased  to  call  "a  perfectly  new  and  solid  system  of 
finance."     The  public  expenditure  of  that  year  amounted  to 
twenty-five  and  a  half  millions,  of  which  sum  only  six  and  a 
half   millions  were  provided  for  by  existing  unmortgaged 
taxes,  leaving  nineteen  millions  to  be  raised  by  extraordinary 
means.     In  the  then  condition  of  the  money  market  it  was 
felt  to  be  impossible  to  borrow  such  an  amount  in  the  ordi- 
nary manner,  that  is,  providing  by  new  taxes  for  the  pay- 
ment of  only  the  permanent  annual   burden  occasioned  Iiy 
the  increased  debt ;  and  a  new  impost,  calculated  to  produce 
seven  millions,  was  sanctioned  by  parliament,  which  im])08t 
was  to  be  continued  until  it  should  in  conjunction  with  the 
produce  of  the  sinking-fund,  repay  the  twelve  millions  that 
would  be  still  deficient.     This  new  system  of  finance  misrht 
have  been  entitled  to  the  character  given  of  it  by  Mr.  Pitt,  il 
it  had  not  been  probable, —  nay,  certain,  that  in  the  follow- 
ing years  an  equal  expenditure  must  be  met  by  similar  means, 
until  the  seven  millions  would  prove  inadequate  even  for  the 
payment  of  the  annual  interest  of  the  sums  for  which  the  taJ 

)  London :  John  Murray,  1851. 


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Oo 


FINANCES  OF  ENGLAND. 


127 


was  imposed,  when  it  would  become  part  of  the  permanent 
Ijuidoiis  of  the  country.  This  new  impost,  to  which  the 
iname  of  "triple  assessment"  was  given,  was  in  fact  an  addi- 
tion inado  to  the  assessed  taxes,  "  in  a  triplicate  proportion 
to  their  jtievious  amount, —  limited,  however,  to  the  tenth  of 
[each  person's  income." 

The  adoption  of  this  or  some  similar  plan  of  financial 
jarranjrenunt  was  hardly  a  matter  of  choice  with  the  minister 
[by  whom  the  funding  system,  as  ordinarily  practised,  could 
[not  have  been  any  further  pursued  at  that  time.     Unfortu- 
Inately  for  the  success  of  the  principle  which  it  was  thus 
Bought  to  establish,  the  mode  in  which  it  was  proposed  to 
raise  the  seven  millions  of  additional   revenue  was  highly 
unpopular;  and  indeed  it  has  always  excited  dissatisfaction 
m  the  part  of  the  public  to  be  called  on  for  the  payment  of 
my  tax  from  which  they  have  not  the  power  to  protect  them- 
selves by  abstaining  from  the  use  of  the  taxed  commodity. 
is  this  eonsideration  which  has  always  made  our  finance 
linisters  j)refer  indirect  to  direct  taxation,  and  which  led, 
iriii<r  the  jjrogress  of  a  long  and  expensive  war,  to  the  im- 
ositiou  of  duties  that  weighed  with  destructive  force  upon 
ic  spriuus  of  industry.     The  financial  difficulties  by  which 
lie  <r(jv(rnment  was  then  embarrassed  may  be  known  from  the 
let  tliat  a  loan  of  three  millions  was  raised  in  April,  1798, 
the  rate  of  £200  three  per  cent  stock,  and  5«.  long  an- 
lity  for  each  £100  borrowed,  being  at  the  rate  of  six  and  a 
aarter  i)er  cent,  and  that  the  "triple  assessment,"  which 
as  calcuhited  to  produce  scAen  millions  yielded  no  more 
kan  four  and  a  half  millions.     In  the  following  December 
ke  triple  assessment  was  repealed,  and  in  lieu  of  it  an  in- 
>me-tax  was  imposed  at  the  rate  of  ten  per  cent  upon  all 
[comos  amounting  to  £200  and  upwards,  with  diminishing 
tcs  upon  smaller  incomes,  down  to  sixty  pounds  per  annum, 
low  which  rate  the  tax  was  not  to  apply.     This  tax  was 
timatod  to  produce  ten  millions :  it  was  called  a  war  tax ; 
when  the  minister  proceeded  to  mortgage  its  produce  to 
iray  the  interest  of  loans  to  a  large  amount  such  a  name 
poarcd  to  be  little  better  than  a  delusion.     Like  the  triple 


128 


ECONOMIC  HISTORY. 


if: 


mm 


assessment,  the  produce  of  the  income-tax  fell  greatly  short 
of  its  estimated  amount  and  yielded  no  more  than  seren 
millions,  a  larpe  part  of  which  was  quickly  absorbed  to  de- 
fray  the    ii  teresl   ot   loans  for  which  it  was  successivelv 
pledged.     In  1801,  after  deducting  the  sums  thus  chargealile 
on  it,  this  tax  produced  only  four  millions  towards  the  na- 
tional expenditure.     In  proposing  a  loan  of  twenty-five  and 
a  half  millions  for  tb-'  service  of  that  year,  it  was  considered 
inexpedient  to  uiciigi,:o  the  income-tax  any  further,  and 
new  taxes  wf. re  im|K"'>      T^imated  to  yield  £1,800, 000  per 
annum,     lii  Maroli,  180%  pence  was  made  with  France,  and 
in  the  saiiiy  mon  b  no^^ice  w^.;     i"en  by  the  Chancellor  of  the 
Exchequer,  Mr.  Addir./tor,  ■/   iWh  intention  to  repeal  the 
income-tax,  which  was  felt  lic  ue    '   iny  oppressive,  and  had 
become  more  and  more  odious  to  the  people.     In  effecting 
this  repeal,  and  at  the  same  time  to  keep  faith  with  the  pul)- 
lic  creditors  to  whom  its  produce  had  been  mortgaged  to  tk 
extent  of  fifty-six  and  a  half  millions  of  three  per  cent  stock, 
additional  taxes  were  imposed  upon  beer,  malt,  and  hops, 
and  a  considerable  increase  was  made  to  the  assessed  taxes; 
besides  which  an  addition  under  the  name  of  a  modificatioa  I 
was  made  to  the  tax  on  imports  and  exports  previously  knon  j 
under  the  name  of  the  convoy  duty. 

At  this  time  the  aggregate  amount  of  permanent  taiesj 
was  thirty-eight  and  a  half  millions,  exactly  double  what ii 
had  been  at  the  breaking  out  of  the  war  in  1793.    Purin?! 
those  nine  years  taxes  to  the  amount  of  £280,000,000  ex- 
clusive of  the  cost  of  collection  had  been  levied  from  the  peo- 
ple ;  and  a  few  words  are  necessary  in  order  to  account  fortlifj 
seeming  contradiction  implied  in  the  fact  that,  notwithst 
ing  this  ruinous  rate  of  expenditure,  many  of  the  great  inter-j 
ests  throughout  the  country  wore  the  outward  appearance «| 
prosperity.     A  nation  engaged  in  an  expensive  war,  v^m 
calls  for  the  systematic  expenditure  of  large  sums  beyond  iBj 
income  may  be  likened  to  an  individual  spendthrift  diirmij 
his  career  of  riot  and  extravagance ;  all  about  him  wm"! 
the  aspect  of  plenty  and  prosperity,  and  this  appearance  wf 
continue  until  his  means  begin  to  fail,  and  those  who  haflj 


ill 


FINANCES   OF  ENGLAND. 


129 


tasa 

kliatit 

Duritt? 

900  «•  I 

Jorttel 
Itinteii 


hco' 


fattened  upon  his  profusion  are  at  length  sent  away  empty. 
The  enormous  expenditure  of  the  government  joined  to  the 
state  of  tlic  currency  (as  already  explained)  necessarily  caused 
a  general  and  great  rise  of  prices;  as  regarded  agricultural 
produce,  this  effect  was  exaggerated  by  the  ungenial  nature  of 
the  seasons.    Rents  had  risen  throughout  the  country  in  a  far 
L'reater  degree  than  the  necessary  expenditure  of  the  land- 
owners, who  thence  found  their  situations  improved,  notwith- 
standinsr  the  additional  load  of  taxation.     The  great  number 
of  contractors  and  other  persons  dealing  with  the  government 
had  derived  a  positive  benefit  from  the  public  expenditure, 
and  being  chiefly  resident  at  the  seat  of  government,  they 
were  enabled  greatly  to  influence  the  tone  of  public  opinion. 
The  frreater  command  of  money  thus  given  to  considerable 
classes  occasioned  an  increased  demand  for  luxuries  of  for- 
eign and  domestic  production,  from  which  the  merchants  and 
dealers  derived  advantage.     There  were  besides  other  classes 
of  persons  who  profited  from  the  war  expenditure.     These 
were  the  producers  of  manufactured  goods  and  those  who 
dealt  in  them,   and  who  found  their  dealings   greatly  in- 
creased by  means  of  the  foreign  expenditure  of  the  govern- 
ment in  sulisidics  and  expeditions,  the  means  for  which  were 
furnished  through  those  dealings;  the  manufacturers  were  at 
the  same  time  l)eginning  to  reap  the  advantages  that  have 
since  been  experienced  in  a  more  considerable  degree  from 
i  the  series  of  inventions  begun  by  Hargreaves  and  Arkwright, 
j  and  which  acted  in  some  degree  as  palliatives  to  the  evil 
[effects  of  the  government  profusion. 

As  in  the  case  of  the  spendthrift,  while  all  these  causes 
[were  in  operation  there  was  an  appearance  of  prosperity,  and 
[those  who  were  profiting  from  this  state  of  things  were  anx- 
ious to  keep  up  the  delusion.  That  it  was  no  more  than  delu- 
Ision  will  be  at  once  apparent  to  all  who  examine  below  the 
js'irface,  and  who  inquire  as  to  the  condition  of  poverty  and 
pretcheduess  into  which  the  great  mass  of  the  people  were 
jthen  plunged.  In  some  few  cases  there  had  been  an  advance 
jot  wa^es;  l)ut  this  occurred  only  to  skilled  artisans,  and 
|even  with  them  the  rise  was  wholly  incommensurate  with  the 

9 


130 


ECONOMIC  HISTORF. 


II  I 


increased  cost  of  all  the  necessaries  of  life.    The  mere  laborer 
—  he  who  had  nothing  to  bring  to  mr*rket  but  his  limbs  and 
sinews —  did  not  participate  in  this  partial   compensation 
for  high  prices,  but  was  in  most  cases  an  eager  competitor 
for  employment  at  the  same  or  nearly  the  same  wages  as  had 
been  given  before  the  war.     Nor  could  it  well  be  otherwise, 
since  the  demand  for  labor  can  only  increase  with  the  in- 
crease of  the  capital  destined  for  the  payment  of  wages ;  and 
we  have  seen  that  capital,   so  far  from  being  suffered  to 
accumulate,  was  dissipated  by  the  government  expenditure 
more  rapidly  than  it  could  be  accumulated  by  individuals, 
In  London  and  its  vicinity  the  rates  of  wages  arc  necessarily 
higher  because  of  the  greater  expense  of  living  than  in  coun- 
try districts ;  and  it  is  asserted  from  personal  knowledge  of 
the  fact  that  at  the  time  in  question  there  was  a  superabund- 
ant supply  of  laborers  constantly  competing  for  employment 
at  the  large  government  establishments,  where  the  weekly 
wages  did  not  exceed  15«.,  while  the  price  of  the  quartern 
loaf  was  1«.   lOd.f   and  the  other  necessary  outgoings  of  a 
laborer's  family  were  nearly  as  high  in  proportion.    If  we 
contrast  the  weekly  wages  at  the  two  periods  of  1790  and 
1800,  of  husbandry  laborers  and  of  skilled  artisans,  measur- 
ing them  both  by  the  quantity  of  wheat  which  they  could 
command,  it  will  be  seen  that  the  former  could  in  1790  pur- 
chase eighty-two  pints  of  wheat,  and  in  1800  could  procure 
no  more  than  fifty-three  pints,  while  the  skilled  artisan,  ffho 
in  1790  could  buy  one  hundred  and  sixty  nine  pints,  could 
procure  in  1800  only  eighty-three  pints.     To  talk  of  the  pros- 
perous  state  of  the  country  under  such  a  condition  of  things 
involves  a  palpable  contradiction.     It  would  be  more  correct 
to  liken  the  situation  of  the  community  to  that  of  the  inhabi- 
tants of  a  town  subjected  to  a  general  conflagration,  in  whicli 
some  became  suddenly  enriched  by  carrying  off  the  valuables, 
while  the  mass  were  involved  in  ruin  and  destitution. 

It  may  be  objected  to  the  view  here  taken,  but  which  i?  j 
founded  upon  facts  that  hardly  admit  of  controversy,  that  j 
had  the  condition  of  the  country  been  such  as  is  represented. 
we  must  have  sunk  under  the  greater  efforts  we  were  so  soon  j 


The  public 
^vas  h^gun  in 
in  1801  and  ] 
^*^lo,  was  cond 
^n  1792,  the  las 
•jf  the  kingdoi 
'^^^67,333  int 
'■"It  expenditur 
"P-^n  the  debt  ( 
■^'100,832,260  p 
'Jiirseracnts  of  t 
outlay  ever  madt 
"'illion  of  the  s 
It  is  hardly  pc 
""•e  could  have 
"'^"<^e-    Tlie  sta 
"■''^  made  to  suf 
•at  foll,,,e,l,  su 
''"^  financial  effc 
"-''^'^^  preceding 
7«'aacontinua 
^■e  mentioned: 
r^'^^ebt,  during  t 
^'■'^'•aged  ^84,067 


FINANCES  OF  ENGLAND. 


181 


after  called  on  to  sustain ;  and  there  is  every  reason  to  be- 
lieve that  but  for  the  invention  of  the  spinning- jenny  and  the 
improvements  in  the  steam-engine,  which  have  produced  such 
almost  magical  effects  upon  the  productive  energies  of  this 
kinjrdom,  it  would  have  been  impossible  to  have  withstood 
the  combination  with  which  single-handed  we  were  called 
upon  to  contend.  The  manner  and  degree  in  which  these 
powerful  agents  have  enabled  us  to  withstand  and  to  triumph 
over  difficulties  unparalleled  in  the  history  of  the  world  have 
been  shown  in  a  preceding  section  of  this  inquiry. 


CHAPTER  II. 


The  public  expenditiire  of  England  during  the  war  which 
was  begun  in  1793  and  continued  (with  short  intermissions 
in  1801  and  1814)  until  the  final  overthrow  of  Napoleon  in 
1815,  was  conducted  throughout  upon  a  truly  gigantic  scale. 
In  1T92,  the  last  year  of  peace,  the  entire  public  expenditure 
of  the  kingdom  was  £19,859,123,  which  sum  included 
i9,767,333  interest  upon  the  public  debt.  In  1814  the  cur- 
rent expenditure  amounted  to  £76,780,895,  and  the  interest 
upon  the  debt  to  £30,051,365  making  an  aggregate  sum  of 
1106,832,260  paid  out  of  the  public  exchequer  for  the  dis- 
bursements of  that  one  year.  This  is  the  largest  annual 
outlay  ever  made ;  that  of  the  previous  year  was  within  one 
million  of  the  same  amount. 

It  is  hardly  possible  to  conceive  that  the  public  expendi- 
ture could  have  been  long  continued  upon  this  scale  of  mag- 
nitude. The  state  of  exhaustion  under  which  the  country 
^v:is  made  to  suffer,  during  the  first  few  years  of  the  peace 
that  followed,  sufficiently  attests  the  truth  of  this  opinion. 
The  financial  efforts  of  the  government  had  been  made  for 
siveral  preceding  years  with  a  degree  of  lavish  profusion 
that  was  continually  augmented  until  it  reached  the  height 
above  mcntiimed;  the  expenditure,  including  interest  upon 
the  debt,  during  the  ten  years  from  1806  to  1815  inclusive, 
averaged  £84,067,761  per  annum,  sums  which,  until  the 


182 


ECONOMIC  HISTORY. 


years  In  which  they  were  actually  expended  it  would  hare 
been  considered  wholly  chimerical  to  expect  to  raise.  Tlie 
experience  of  that  period  has  shown  how  impossible  a  tliint' 
it  is  to  judge  correctly  from  the  past  as  to  the  growing  re- 
sources of  our  country,  or  it  might  be  confidently  afliriiuMl 
that  during  the  concluding  years  of  this  series  we  liaJ 
assuredly  reached  the  limit  of  possibility.  Without  that 
experience  for  their  guidance,  our  ancestors,  in  former  Imt 
not  very  remote  times,  gave  way  to  gloomy  forebodin<rs  as  to 
their  future  prospects,  at  which  we  cannot  but  smile  whrn 
thinking  of  the  comparatively  pygmy  efforts  which  calkd 
them  forth.  Some  of  those  forebodings  have  been  recoideil 
by  Sir  John  Sinclair  in  his  work  on  the  public  revenue  of 
this  kingdom.  A  few  passages  upon  the  subject  taken  from 
that  work,  and  with  the  dates  at  which  they  were  written, 
may  not  be  without  interest  to  the  reader  at  the  present 
moment. 

1736.  "The  vast  load  of  debt  under  which  the  nation  still 
groans  is  the  true  source  of  all  those  calamities  and  gloomy  prospicU 
of  wliich  we  have  so  much  reason  to  complain.  To  this  lias  becD 
owing  that  multiplicity  of  burdensome  taxes  which  have  UKue  tiian 
doubled  the  price  of  the  common  necessaries  of  life  witliin  afew 
years  past,  and  tlioreby  distressed  the  poor  laborer  and  iiianufnc- 
turer,  disabled  the  farmer  to  pay  his  rent,  and  i)ut  even  gfiitkniea 
of  j)h'iitiful  estates  under  the  greatest  difficulties  to  make  a  tnkr- 
able  provision  for  their  families."  ^ 

At  the  time  this  gloomy  picture  was  drawn  the  pul)lic  deM 
did  not  exceed  £50,000,000,  and  the  annual  charue  on  that 
account  was  somewhat  under  £2,000,000,  being  considoralily 
below  the  sums  added  to  the  public  burdens  in  the  sinirle 
year  1814. 

1749.  "Our  parliamentary  aids,  from  the  year  1710,  exclu- 
sively, to  the  year  1748,  inclusively,  amount  to  dB5.^,r)2L',li")9  Ife 
3rf.,  a  sum  that  will  appear  incredible  to  future  generations,  and  is 
80  almost  to  the  present.  Till  we  have  paid  a  good  part  of  our 
debt,   and  restored  our  country  in  some  measure  to  her  former 


1  The  Craftsman,  No.  602, 14th  February,  1736. 


FINANCES  OF  ENGLAND. 


133 


wealth  and  power,  it  will  be  difficult  to  maintain  the  dignity  o£ 
Griat  Britain,  to  make  her  respected  abroad,  and  secure  from 
iiijurios  or  even  affronts  on  the  part  of  her  neighbors."  * 

Tho  debt,  to  the  effects  of  which  so  much  evil  is  here  at- 
tril)utcd,  was  still  under  j£80,000,000,  and  the  annual  inter- 
est scarcely  more  than  jE  3, 000, 000. 

17 ')(').  "It  has  been  a  generally  received  notion  among  political 
aritliiiii'ticians,  that  we  may  increase  our  debt  to  £100,000,000, 
l.iit  tlit'y  acknowledge  that  it  must  then  cease,  by  the  debtor 
beooiuing  bankrupt.'" 

In  the  few  years  that  preceded  the  publication  of  Mr. 
Hannay's  letters  the  debt  had  been  somewhat  diminished, 
sti  that  it  amounted  to  about  ^£75,000,000,  and  the  annual 
charge  on  the  country  to  £2,400,000. 

17(il.  "The  first  instance  of  a  debt  contracted  upon  parliamen- 
tary security  occurs  in  the  reign  of  Henry  VI.  The  commence- 
ment of  this  pernicious  practice  deserves  to  be  noted,  — a  practice 
tile  more  likely  to  become  pernicious  the  more  a  nation  advances  in 
(>|mK'nce  and  credit.  The  ruinous  effects  of  it  are  now  become 
ajiparent,  and  threaten  the  very  existence  of  the  nation.'"* 

The  public  burdens  had  by  this  time  so  far  exceeded  the 
possible  limit  assigned  by  Mr.  Hannay,  that  the  debt 
amounted  to  nearly  X 150, 000, 000,  and  the  annual  interest 
to  £4,800,000.  The  amount  was  somewhat  reduced  between 
that  period  and  the  breaking  out  of  the  American  war,  when 
a  succession  of  loans  again  became  necessary.  On  winding 
up  the  accounts  of  that  contest,  the  debt  amounted  to 
i2'j8,00O,OOO,  and  the  annual  charge  to  ^£9,500,000.  On 
the  oth  of  January,  1793,  just  before  the  beginning  of  the 
war  ot  the  French  Revolution,  the  debt  continued  nearly  the 
same  as  at  the  beginning  of  the  peace  (the  exact  amount  of 
I  funded  and  unfunded  debt,  including  the  value  of  terminable 

'  Some  Reflections  on  the  Present  State  of  the  Nation,  by  Henry  St.  John, 
I  lofil  Bolingbroke. 

*  Letters  by  Samuel  Hannay,  Esq. 

'  Hume's  Uistory  of  England,  8vo  edition,  1778,  vol.  iii.  p.  216. 


184 


ECONOMIC  HISTORY. 


ABSTRACT   OF    PUBUO   INCOMB    AND    BXPENniTURR    IN   TUB  UNITED  KINODOX 
IN  KAOU  YBAH,  VKOM  ITlXi  TO  1840. 


VlAKI 


I7S2 

17118 
1704 
1706 
1790 
1707. 
1708. 
1700 
18U0. 
1*11. 
18U2. 
1803 

1801  r 

1806 
1806. 

im. 

18U8 
1H09 
1810 
1811. 
1812 
1819 
1814. 
1816 
1816. 
1817 
1318 
1819 
18% 
1821 
1822 
1823 
1*24 
1826 
]82(i 
1827 
1S28 
1820 
I83<l 
1831 
1832 
1833. 
1.S34 
1836 
1836. 
1837. 
ia38 
1889. 
1840. 
1841 
1842 
1843. 
1844. 
1846 
\M» 
1S47 
1848 
1849 


Imoomi. 


£19^268.814 
10,845,7115 
20,103,074 
10,883,520 
21,404,728 
23,12t(,04<l 
81,086,3)18 
35,002,141 
34,146,584 
34,113,140 
86,368,140 
88,00i),3U2 
46,170,402 
60,807,706 
65,706,080 
6U,83»,321 
62,908,191 
63,719,400 
67,144,642 
65,173At5 
66,037,850 
68,748 ,3H3 
71.134,503 
72.210.512 
62,264,546 
62,055.913 
63,747,795 
62.648,847 
64,2h2,058 
66,8:i4.102 
66  Ul!3,650 
67,672.990 
60,362,403 
67.273.861) 
54,894,989 
64,032.618 
65,187.142 
60,786,682 
50,056,616 
46,424,440 
46.088,765 
46,271,326 
46,425.263 
46,893,369 
48,591.180 
46,475,194 
47,.'fi3.4tiO 
47,844,899 
47.567.565 
48,081,3(i0 
46,065,681 
62.582,817 
64,003,754 
63.060.364 
63.790,138 
61,546,265 
58,388,717 
62,951,740 


« 

4,877,96ti 

6,998,389 
30,464, M31 
22,244,982 
30,35tl,H73 
16,868,603 
21,714,8ia 
23,030,629 
27,305,271 
14.638,254 

8,752.161 
14,5;il,76ii 
16  H40,80l 
13,03.'i,3il 
10,4.32,0.^ 
12.005,i)44 
12,208,379 

7,792.444 
19,143,063 
'.'4,700,697 
8!).640,282 
34,5«i3,6()3 
20,241,807 
614,059 


853,037 
1,014,359 


BiruDRoai 


7,476,853 

1,693,»4.'> 

874,668 


£19.26<«,814 

24,723,tltll 
27,101,463 

60,318.351 
43,699,710 
53,483,813. 
47,898,866 
67,317,307 
67,176,113 
<1,418,417 
61,006,408; 
47,862,153 
60,747,255 
67,747,607 
71,831,430 
60.772,256 
76,093,236 
76,017,770 
74,036,086 
84.317,498 
89,828,547 
10H,397.645 
106,608,106 
92,452,319 
62,778,iH)5 
62.055,013 
53,747.7!»5 
52.648,847 
54.282,958 
65,834,192 
55,663,650 
57,672,!»99 
69.3(S2,403 
67.273.869 
54,804,089 
64,9.32,518 
66,187,142 
60,786.682 
60,056,616 
46,424,440 
47.322,744 
46,271,3261 
40,425,263' 
45,893,3691 
48.591,1S0 
46,475,194| 
47,33;j,4ti0! 
47.844,809, 
47.667,565 
48,9,37 ,3H7. 
48,580.026 
62,682,817 1 
64.00.3.754 
63.060.354 
63.790,138 
60,022.617 
54.982,r,il2  i 
63,326,317:1 


£9,767,3:13  £3,421,681 

9,437,862 

0,80<),0(»4 

10,810,728 

11,811,204 

14,270,616 

17,686,618 

17,220,98J1 

17.381,661 

19,945,624 

19.865,588 

20,699,864 

20,726,772 

22,141,426 

23,i«t,006 

23,362,686 

23,158,982 

24  213.867 

24,246,946 

24,»77,916 

25.546,508 

28,030,239 

30,051,365 

31,576,074 

32,!i38.751 

31,436  246 

30,880,244; 

30,807,240 

31,157,846i 

81,955,3041 

20,021,493, 

29,215,005! 

20,066,300; 

28,060,287 

28,076.957 

28,239,8471 

28,095,506; 

29,155,6121 

29,118,8f)8, 

28,341,4161 

28,323,751; 

28,522,507! 

28,604,096 

28,514,610 

29,243.598 

29,489.571 

29  260.238 

29.454,062 

29.381.718 

29.450,145 

29,428,120 

29,260,160 

30.4!t5,45g 

28,263,872 

28,"»77,987 

28.141,531 

28.563,517 

28,323,961 


1,826,814 

1,624,600 
3,163,130' 
I.OIH.OI'J, 
4,  KM  .467 
2,!M2,564! 
6,261,725' 
6,456,650; 
9,!KH),725| 
1,195,531: 
2,023,028! 
4,f)67,9«5 
2,760.0031 
l,936,4tni 
2,673,868 

5,696! 
1.023,784 
1,776,378 
1,270.060 
l,590,727j 
1,086,885 

7,406! 


8,016| 


8,741 
1,663,361 
4,143,891 


!' 


21,074 


£7,070,109 
14,769,208 
17,851,213 

37,603,440, 

80,334,087 

8(i,469,9U3, 

83.641,727 

3'<,4(i3,42l! 

39,43i»,7(«i 

41,3Hy,,W,| 

29,693,6111 

28,298,3i«i 

88,(4!),4»'>j 

46 ,027, Kit; 

45,941,205 

44,250,;i67 

40,084,105 

62,352,146 

68.757,3118 
63,210,816 
77,913,488, 
76,780,8%] 
60.704.  KW 
32,231,020 
22.018,1T«| 
20,843,7'28| 
21,43t).i:iii 
21,38l,;jHai 
21,07o,8ffil 
20,826,5671 
21,746,1111 
23,70S,ffi:i 
23.559,7411 
25,808,580 
25,560.44t!! 
21,407,6TO| 
19,01!t.62'J| 
18,024,08'. 
18.781.882 
18,050.'24,'. 
16.235,735 
16,307,005 
15,884,640 
17,268,871 
17.641,383 
18,418  449 
19,903,ti;i!i 
10,770,818 
20,735^1 
21,517.049 
21,870,353 
20,152,18!!, 
20,988,84(1 
22,865.843, 
26,3t;i,41fi. 
25.621,til9 
22,529,661, 


111 


£19,8SIl,m 
24,lli;,ii?i 
27,742,11: 
4»,4U,l;: 
42,i:cai 
6li,;4ii,'i'ii 
f>l,l!!:„'(5 

66,821.31; 

6i,a;ii,i:9 

4«,MWi; 
48,M><,i)l 

hn'im 

07,l>)'.i.3I't 
t)8.U4Ull 
«7,Kl,S.i« 
73,l43,w; 
7n,i>w,(ii3 
7t),*»Mit 

88,:6;,S!« 

10.'i.'J4.1.?r 

iitti,hai.w 
y2,2*,i'<i 
Co,!*,"! 
65.2Hl.ai 
«,34*.5;< 

54,4.i:.2j; 

6',13lo* 

fi;i,iiniiit 
5ti.22;i.:*i 

CU,231.1'il 
61.5:i'."'i 
Sfi.CSl.";! 
55.C:3..52I 

54,i;i.iti 

51,841.13: 
4:M';!1,1''' 
49,79:.la« 
4»i,3;wi'J 
45,TS>,i«i 

46,()t!l.3« 
48.(r!i3.1.»i 
49 IW.!* 
47,6»',I'-' 
49,36;,«»1 
4n,lS'.Sl 

5fl.945.W 

6i.u<.a 

69  S*).*) 

M.i^y* 

60,«:ii»i 


FINANCES  OF  ENGLAND. 


186 


2a 

>"a 

0  M 


S  1) 

=  a 


;< 
«! 


§. 


I 


"  ^1^        ^i4  ^H  ^^  ^^  ^^  ^^        ^^        ^^  ^^        ^^        ^^  ^^  ^^  ^^        ^^ 


^1 


s 


9    :S 


li?iiiii§l§iPfi3Hii3iiiii 


Cti 


I 


^l^lf' 


§ 


L5.5' 


S5J 


§£•1 

la* 


(A 


3. 


S  Si 


COS.      Ol- 
00  M       m'iiS 


«s 


aska-'"ss'" 


2    .^co 


iilil 


SI 


bacaoaoxooxoDODcrjcOQqS 


186 


ECONOMIC  HISTORY. 


annuities  was  jE  261, 735, 059,  and  the  annual  charge  was 
£9,471,675).  From  that  time  to  the  peace  of  Amiens 
hardly  a  year  passed  without  witnessing  some  increase  to  the 
national  burdens,  so  that  at  midsummc,  1802,  the  capital 
of  the  funded  and  unfunded  debt  amounted  to  £637,009,000, 
On  the  5th  of  January,  1816,  the  capital  was  £885,18^,323, 
and  the  annual  charge  was  £32,457,141.  The  preccdinL' 
statements  exhibit  the  progressive  state  of  the  public  income 
and  expenditure  from  1792  to  1849,  including  the  annual 
charge  on  account  of  the  public  debt ;  and  the  amount  of 
money  raised  by  loans,  and  the  funding  of  Exchequer  Bills, 
with  the  amount  and  description  of  stock  created,  and  the 
annual  charge  in  respect  of  the  same  in  each  year  from  the 
beginning  of  the  present  century. 

An  extraordinary  degree  of  delusion  is  observable  in  the 
proceedings  of  the  different  finance  ministers  by  whom  the 
support  of  the  sinking-fund  was  advocated  during  the  war. 
It  has  been  pretended  that  the  purchases  made  by  means  of 
that  fund  had  the  effect  of  keeping  up  the  market  value  of 
the  public  debt,  and  thereby  enabled  the  minister  to  con- 
tract loans  upon  more  advantageous  terms  than,  witliout 
this  machinery,  would  have  been  possible.  It  may  well  be 
doubted,  however,  whether  the  repurchase  in  this  manner. 
from  time  to  time,  of  parts  only  of  that  surplus  portion  of 
the  public  debt  which  was  created  for  the  express  purpose  of 
such  operations,  had  any  real  effect  in  raising  the  price 
of  the  remaining  portion  of  the  public  securities;  in  other 
words,  whether  the  price  thus  factitiously  acted  upon,  of  the 
larger  amount  of  debt,  was  at  any  time  greater  than  the 
price  wotild  have  been  of  the  smaller  amount  of  debt  that 
would  have  existed  if  the  sinking-fund  had  not  been  created, 
the  purchases  of  the  commissioners  never  having  in  fact 
accomplished  more  than  the  repurchase  of  the  so  noedlcssk 
created  part  of  the  debt.  It  has  been  further  urged  in  de- 
fence of  the  sinking-fund  that  the  prospect  which  it  enaliled 
the  minister  to  hold  out  of  the  speedy  redemption  of  the 
whole  debt  had  the  effect  of  reconciling  the  people  to  the 
payment  of  a  larger  amount  of  taxes  than  they  would  other- 


FINANCES  OF  ENGLAND. 


137 


wise  have  been  willing  to  pay.  Allowing  that  the  effect 
here  stated  was  produced,  we  may  still  doubt  the  wisdom  of 
that  frovcriinient  which  is  obliged  to  resort  to  a  juggle  in 
order  to  leconcile  the  people  to  its  measures,  and  especially 
when  as  in  the  case  under  examination,  the  delusion  was  so 
expensive  and  likely  to  prove  so  permanently  injurious  in  its 
nature. 

The  average  rate  at  which  three  per  cent  stock  was  cre- 
ated between  1793  and  1801  was  je57  78.  6d.  of  money  for 
£100  stock,  and  the  average  market  price  during  that  period 
was  £01 178.  6d.  for  ^100  stock.     The  loss  to  the  public  upon 
the  additional  sum  borrowed  in  order  that  it  might  be  re- 
deemed during  that  period,  which  was  £49,655,531,  amounted 
to  four  and  a  half  per  cent,  or  .£2,234,500.     Between  1803 
and  the  termination  of  the  war  the  average  price  at  which 
loans  were  contracted  was  £60  7«.  Qd.  per  £100  stock,  and 
the  average  market  price  during  that  time  was  £62  178.  6c?. 
per  £100.     The  loss  was,  therefore,  two  and  a  half  per  cent 
upon  the  sum  redeemed  during  that  time,  £176,173,240  or 
£4,404,381,  making  together  an  amount  of  £6,638,831  abso- 
lutely lost  to  the  public  by  these  operations.     This  amount, 
reckoned  at  the  average  price  of  the  various  loans,  is  equiva- 
lent to  a  capital  of  more  than  eleven  millions  of  three  per 
ccut  stock,  with  which  the  country  is  now  additionally  bur- 
dened through  the   measure   of  borrowing   in  a  depressed 
market  more  money  than  was  wanted  in  order  to  its  being 
repaid  wlien  the  market  for  public  securities  was  certain  to 
be  hijrher.     The  fallacy  attending  this  system   is   now  so 
fully  reeognizcd  that  it  is  not  likely  any  minister  will  in 
future  niiikc  a  show  of  redeeming  debt  at  the  moment  when 
circumstances  compel  him  actually  to  increase  its  amount 
for  that  pur[)(>8e. 

Another  error,  of  a  still  more  important  nature,  involved  in 
this  system  remains  to  be  noticed.  The  absurdity  of  borrow- 
in?  money  in  order  to  extinguish  debt  could  never  have  been 
seriously  adopted  but  with  the  anticipation  of  the  good  effects 
that  might  be  drawn  from  such  a  course  after  the  necessity 
for  further  borrowing  should  cease,  when  it  might  be  benefi- 


138 


ECONOMIC  HISTORY. 


cial  to  apply  towards  the  redemption  of  the  debt  the  high 
scale  of  taxation  which  that  system  rendered  practicable. 
There  never  could  have  existed  any  doubt  of  the  fact  that 
whenever  the  necessity  for  borrowing  should  cease  the  mar- 
ket value  of  the  public  funds  would  advance  greatly,  and 
would  therefore  in   an  equal   degree   limit  the   redeeming 
power  of  the  surplus  income,  how^ever  arising.     The  knowl- 
edge of  this  fact  should  have  led  the  ministers  by  whom 
successive  additions  were  made  to  the  public  debt  to  the 
adoption  of  a  course  which  would  have  enabled  them  to  turn 
this  rise  of  prices  to  the  advantage  of  the  public,  instead  of 
its  being,  as  it  has  proved,  productive  of  loss ;  and  this  end 
would  certainly  have  been  accomplished  if,  at  the  expense  of 
a  small  present  sacrifice,  the  loans  had  been  contracted  at  a 
high  rate  of  interest,  instead  of  their  having  been  contracted, 
as  for  the  most  part  tney  were,  in  three  per  cent  annuities. 
It  is  presumable  that  if  the  borrowing  had  been  restricted  to 
the  sums  actually  wanted  from  time  to  time,  without  thougiit 
of  a  sinking-fund,  the  public  might  possibly  have  had  to  pay 
at  the  outside  a  quarter  per  cent  more  of  annual  interest 
than  they  actually  paid.     At  this  rate  the  deficiency  of  in- 
come compared  with  expenditure  between  1793  and  1815, 
which   amounted,  as  will  be  shown  in  the  next  table,  to 
jE425,482,761  would  have  occasioned  an   addition  to  the 
capital  of  the  debt  to  the  amount  of  .£455,266,554  of  five  per 
cent  stock,   the  annual  interest  of  which  would  have  been 
£22,763,327,  instead  of  a  nominal  capital  of  ^£547,292,7134. 
with  the  annual  additional  charge  of  JE  20, 690, 871.     At  the 
close  of  the  war  the  nominal  capital  of  the  debt  would  have 
then   amounted   to   £724,285,729,    and   the   annual  charge 
to  £32,530,660,  instead  of   £816,311,939  of  capital,  and 
£30,458,204  of  annual  charge,  which  was  the  state  of  the 
imredeemed  public  debt  on  the  5th  of  January,  181<).    The 
government  would  then  have  been  in  the  most  favorable  posi- 
tion for  taking  advantage  of  the  lowering  of  the  rate  of  inter- 
est which  was  certain  to  follow,  and  many  years  before  tl'C 
])rc8cnt  time  the  whole  of  the  five  per  cent  annuities  niisiM 
have  been  converted  without  any  addition  to  the  capital  into 


FINANCES  OF  ENGLAND. 


139 


annuities  of  the  same  amount  bearing  interest  at  the  rate  of 
three  and  a  half  per  cent  or  perhaps  lower.  Assuming,  how- 
ever, that  the  reduction  would  not  have  gone  lower  than 
three  and  a  half  per  cent,  and  taking  into  consideration  the 
surplus  revenue  which  has  been  actually  applied  to  the  re- 
demption of  debt  between  5th  January,  1816,  and  5th  Janu- 
ary, 1849,  which,  as  will  be  seen,  amounted  to  £45,779,046, 
the  funded  debt  existing  on  5th  of  January,  1837,  would 
have  amounted  to  »£678,506,683,  and  the  annual  charge  to 
£23,747,734,  instead  of  its  actual  amount,  £773,168,316, 
and  its  actual  annual  charge  £27,686,458;  showing  that  the 
loss  entailed  on  the  country  by  the  plan  pursued,  of  funding 
the  debt  in  stock  bearing  a  nominal  low  rate  of  interest,  is 
£94,001,633  of  capital,  and  £3,938,724  of  annual  charge. 
It  is  not  possible  to  calculate  with  certainty  the  further 
benefits  that  must  have  resulted  from  the  repeal  of  five  mil- 
lions and  a  half  of  annual  taxes,  which  would  have  been 
practicable  beyond  the  amount  actually  repealed ;  but  it  is 
probably  much  under-estimating  those  benefits  to  state  that 
among  their  results  the  amount  of  public  income  over  expen- 
diture would  have  been  so  far  augmented  that  the  unredeemed 
debt  would  not  at  this  time  have  exceeded  six  hundred  mil- 
lions, while  the  annual  charge  upon  the  same  would  have 
been  twenty-one  millions,  a  state  of  things  at  which,  if  the 
peace  of  Europe  should  continue  undisturbed,  and  if  our  pro- 
gress should  only  equal  our  past  experience,  we  may  possibly 
hope  to  arrive  in  about  half  a  century. 

The  charge  of  inconsistency  on  the  part  of  our  finance 
ministers  is  fully  deserved  by  their  adoption  of  two  measures 
having  for  their  objects  results  exactly  opposed  to  each 
other.  These  measures  are,  first,  the  creation  of  what  is 
called  the  dead-weight  annuity;  and,  secondly,  the  conver- 
sion of  perpetual  annuities  into  annuities  for  lives  or  for 
terms  of  years ;  the  effect  of  the  first  being  to  bring  present 
relief  at  the  expense  of  future  years,  while  the  second  in- 
ereases  the  present  burden  with  the  view  of  relieving  pos- 
terity. When  the  measure  for  commuting  the  half-pay  and 
pensions  was  brought  forward  in  May,  1822,  the  charge  upon 


140 


ECONOMIC  HISTORY. 


the  country  on  that  account  was  estimated  at  about  five 
millions.  This  was  necessarily  a  decreasing  charge,  and 
from  year  to  year  the  public  would  have  been  relieved  by  the 
falling  in  of  lives  until  at  the  end  of  forty-five  yeara  the 
whole,  according  to  probability,  would  have  been  extin- 
guished. In  order  to  turn  to  present  advantage  this  prospec- 
tive diminution  of  burden,  it  was  attempted  to  commute  the 
whole  of  those  annually  diminishing  payments  into  an  un- 
varying annuity  to  last  during  the  whole  probable  term  of 
forty-five  years ;  and  it  was  computed  that,  by  the  sale  of  a 
fixed  annuity  of  j6 2, 800, 000,  funds  might  be  obtained  in 
order  to  meet  the  diminishing  demands  of  the  quarterly 
claimants.  This  scheme  was  only  partially  carried  into 
execution  by  means  of  an  arrangement  made  with  the  Bank 
of  England,  under  which  that  corporation  advanced  to  the 
government,  in  nearly  equal  payments,  during  the  six  years 
from  1823  to  1828,  the  sum  of  £13,089,419  as  the  purchase 
money  of  an  annual  annuity  of  £585,740  to  be  paid  until 
1867.  The  result  of  this  operation  has  been  to  save  the 
immediate  payment,  during  the  years  in  which  it  was  in 
progress,  of  £9,574,979,  and  in  return  to  fix  upon  the  coun- 
try the  annual  payment  for  thirty-nine  years  thereafter  of 
£585,740. 

In  the  prosecution  of  the  opposite  plan  of  converting  per- 
petual annuities  into  annuities  terminable  at  stated  periods 
or  upon  the  occurrence  of  certain  natural  contingencies, 
the  amount  of  terminable  annuities  has  advanced  from 
£1,888,835,  at  which  it  stood  at  the  end  of  the  war,  to 
£3,755,099  at  the  beginning  of  the  year  1850.  It  would 
occupy  considerable  space  to  exhibit  the  progress  of  this  con- 
version from  year  to  year,  and  it  will  probably  suilice  to 
exemplify  the  result  of  the  operation  during  one  year  (1834). 
In  that  year  the  perpetual  annuities  received  in  excliange 
amounted  to  £6,500,169  of  capital,  bearing  an  annual 
charge  of  £202,831,  and  there  were  granted  in  lieu  of 
the  same, — 


FINANCES  OF  ENGLAND. 


141 


Annuities  for  lives i  195,337 

"        for  terms  of  years 313,138 

Deferred  annuities 2,871 

Together £511,346 

making  a  present  annual  increase  of  j£  308, 514  to  the  public 
burdens  in  order  to  ensure  the  earlier  extinction  of  the 
charge  of  .£202,831. 

It  18  not  necessary  here  to  inquire  which  of  these  two 
modes  of  proceeding  is  preferable.  Under  different  circum- 
stances either  of  them  might  be  wise  or  prudent,  but  it  is 
quite  impossible  that  at  the  same  time,  and  consequently  un- 
der the  same  circumstances,  both  could  be  either  wise  or  pru- 
dent; and  the  minister  and  legislators  by  whom  the  plans 
were  proposed  and  sanctioned  must  be  allowed  to  have  stulti- 
fied tlieraselves  by  the  operations.  Of  the  two  courses  that 
is  assuredly  the  most  generous  under  which  the  parties  by 
whom  it  is  adopted  subject  themselves  to  additional  burden 
in  order  to  lighten  the  load  for  their  successors;  and  indeed 
it  would  seem  no  more  than  an  act  of  justice  on  the  part  of 
those  by  whom  the  debt  was  contracted  to  adopt  every  means 
within  their  power  for  its  extinction. 

It  is  singular  that,  with  so  much  experience  and  so  much 
of  scientific  acquirement  that  could  have  been  brought  to  the 
correct  elucidation  of  this  subject,  the  tables  adopted  for  the 
creation  of  terminable  annuities  were  incorrect  to  a  degree 
which  entailed  a  heavy  loss  upon  the  public.  The  system 
was  established  in  1808,  and  during  the  first  year  of  its 
operation  annuities  were  granted  to  the  amount  of  £58,506 
10«.  per  annum.  Of  that  amount  there  continued  payable 
^23,251  per  annum  at  the  beginning  of  1827,  when,  to  adopt 
the  calculation  of  the  actuary  of  the  national  debt,  as  given 
in  a  report  to  the  Chancellor  of  the  Exchequer,  the  public 
liad  already  sustained  a  loss  of  more  than  £10,000  by  tho 
transactions,  besides  having  the  above  annual  sum  of  £23,251 
still  to  pay  for  an  indefinite  term.  In  this  report  of  Mr. 
Finlaison  he  states  that  the  loss  to  the  public  through  mis- 
calculation in  these  tables  was  then  (April,  1827)  proceeding 


142 


ECONOMIC  HISTORY. 


U'    i 


at  the  rate  of  X8,000  per  week,  and  during  the  three  preced- 
ing months  had  exceeded  £95,000.  The  discovery  of  this 
blunder  had  been  made  and  pressed  upon  the  attention  of  the 
finance  minister  as  early  as  1819,  but  no  active  steps  were 
taken  to  remedy  it  until  1828,  and  even  then  the  rates  at 
which  annuities  were  granted  upon  the  lives  of  aged  jtersons 
were,  after  a  time,  found  to  be  so  unduly  profitable  to  the 
purchasers,  that  the  government  was  again  obliged  to  inter- 
fere and  to  limit  the  ages  upon  which  life  annuities  couldbe 
obtained. 

It  is  quite  impossible  that  any  similar  series  of  blunders 
could  have  been  committed  by  any  private  persons  or  asso- 
ciation of  individuals  whose  vigilance  would  have  been 
sufficiently  preserved  by  their  private  interest,  and  it  is  dis- 
graceful that  the  government,  which  could  at  all  times  com- 
mand the  assistance  of  the  most  accomplished  actuaries, 
should  have  fallen  into  them.  It  is  yet  more  disgraceful 
that  after  the  evil  had  been  discovered  and  pressed  upon  its 
notice,  so  many  years  were  suffered  to  elapse  before  any  step 
was  taken  to  put  a  stop  to  tlie  waste  of  public  money. 

It  would  require  a  voluminous  account  to  explain  all  the 
financial  operations  of  the  government  during  the  period 
embraced  in  the  foregoing  statements.  In  the  earlier  years 
of  that  time,  while  on  the  one  hand  the  minister  was  an- 
nually borrowing  immense  sums  for  the  public  service,  an 
expensive  machinery  was,  as  we  have  seen,  employed  to  keep 
up  a  show  of  diminishing  the  debt,  and  by  this  means  the 
people  were  brought  to  view  with  some  degree  of  compla- 
cency the  most  ruinous  addition  to  their  burdens  under  the 
expectation  of  the  relief  which,  through  the  magical  effect  of 
the  sinking-fund,  was  to  be  experienced  by  them  in  'future 
years.  The  establishment  and  support  of  this  sinking-fund 
was  long  considered  as  a  master-stroke  of  human  wisdom. 
Having  since  had  sufficient  opportunity  for  considering  its 
effects,  we  have  arrived  at  a  different  conclusion,  and  can  no 
longer  see  any  wisdom  in  the  plan  of  borrowing  larger  sums 
than  were  wanted,  and  paying  in  consequence  more  dearly 
for  the  loan  of  what  was  actually  required  in  order  to  lay 


FINANCES  OF  ENGLAND. 


143 


out  the  surplus  to  accumulate  into  a  fund  for  buying  up  the 
debt  at  a  highei  price  than  that  at  which  it  was  contracted. 

In  the  fourth  report  of  the  Select  Committee  on  Public 
Income  and  Expenditure,  which  was  printed  by  order  of  the 
House  of  Commons  in  1828,  there  are  three  statements 
showing  the  difference  between  the  public  receipts  and  dis- 
bursements in  the  ten  years  ended  5th  January,  1802;  the 
fourteen  years  ended  5th  January,  1816;  and  the  twelve 
rears  ended  5th  January,  1828,  an  abstract  of  which  is  here 
given ;  and  the  statement  is  further  continued  for  the  twenty- 
two  years  ended  6th  January,  1850 :  — 


BALANCES  OF  INCOME  AND  EXPENDITURE. 
Ten  Years  ended  6th  January,  1802. 


Expenditure .  £447,812,773 
Income     .    .      268,669,322 


Expenditure 
more  than 
income  .    .  £189,153,461 


Raised  by  creation  of 
debt £380,997,380 

Applied  to  redemption 
of  debt £180,846,440 

Money  raised  for  Aus- 
tria            4,600,000 

Discount  and  charges 
of  receipt  ....        2,416,497 


Balance  6th  January, 

1802 £9,027,021 

Balance  6th  January, 

1792 4,546,029 


187,862,937 
£103,684,443 


4,480,992 
£189,163,461 


Fourteen  Years  ended  5th  January,  1S16. 


Expenditure  £1,059,683,370 
Income     .    .     823,354,060 


Expenditure 
more  tiian 
income  .   .  £230,329,310 


Raised  by  creation  of 

debt 

Applied  to  redemption 

of  debt £651,962,651 

Raised  for  East  India 

Company    ....        2,500,000 
Discount,  etc.     .    .    .        2,887,199 


£900,107,717 


Balance  6th  January, 

1816 £15,466,678 

Balance  6th  January, 

1802 9,027,021 


657,339,850 
£242,767,867 


6,4.%,667 
£236,329,810 


144 


ECONOMIC  HISTORY. 


Twelve  Years  ended  5th  January,  1898, 


Income      .    .  £070,198,286 
Expenditrre .     640,U6e,C21 


lacotne  more 
than  expen* 
diture    .    . 


Applied  to  1  ademption 
of  debt 

Discount  and  charges 
of  receipt   .... 


Raised  by  creation  of 
debt 


Balance  6th  January, 

1816 £16,465.678 

Balance  6th  January, 

1828 4,228,753 


£29,231,765 


Twenty-two  Years  ended  5(h  January,  1850. 


£680,461,422 

644,588 

£58O,999,0W 

640,530,450 

£4O,4ti«,590 

11,236,825 
£29,231,765 


Income     .     £1,002.219,672 
Expenditure.    1,076,646,391 


Income  more 
than  expen- 
diture    .    .     £16.674,281 


Applied  to  redemption 
of  debt,  beyond  the 
amount  of  debt  cre- 
ated   

Balance  6th  January, 
1850 £9,748,589 

Balance  5th  January, 
1828 4,228,753 


£11,064,495 


6,510,786 
£16,674,281 


It  appears  from  this  statement  that  during  the  ten  years 
from  5th  Jan.,  1792  to  5th  Jan.,  1802:  — 

The  public  expenditure  exceeded  the  income  .     £189,153,451 
Between  1802  and  1816  the  excess  of  expendi- 
ture was 236,329,310 


Excess  of  expenditure  during  twenty-four  years 
of  war £425,482,761 

During  thirty-four  years  of  peace,  between 
1816  and  1850,  the  excess  of  income  over 
expe.iditiire  lias  been 45,779,046 


At  this  rate  it  would  require  three  hundred  and  sixteen 
years  of  peace  to  cancel  the  debt  incurred  during  twenty-four 
years  of  war,  or  thirteen  years  for  one ;  but  the  comparison  is 
even  more  unfavorable  than  this,  because  at  the  time  of  bor- 
rowing the  rate  of  interest  is  high  and  the  value  of  public 


FINANCES  OF  ENGLAND. 


145 


securities  low,  whereas  at  the  time  of  liquidation  the  revcrBe 
of  tlu'90  circumstances  is  experienced;  so  that  on  the  most 
favorable  8ui)positi()n  it  requires  fifteen  years  of  saving  in 
peace  to  repair  the  evil  consequences  of  one  year  of  war  ex- 
iKuditun!;  at  which  rate  our  successors  who  may  bo  living 
aliuiit  tlie  close  of  the  twenty-second  century  might,  if  during 
all  that  time  the  nation  should  remain  at  peace,  find  them- 
selves relieved  from  that  portion  of  the  public  debt  which 
has  been  contracted  since  1792.  On  the  other  hand,  this 
period  would  bo  somewhat  hastened  through  the  extinction 
of  that  part  of  our  public  debt  which  consists  of  terminable 
and  life  annuities. 

It  is  necessary  here  to  explain  briefly  the  financial  plans 
which  have  at  ditTorent  times  within  the  present  century  been 
proposed  by  the  Government  and  sanctioned  by  Parliament. 

At  the  breaking  out  of  the  war  in  1803  it  became  neces- 
sary to  meet  as  far  as  possible  the  increased  expenditure  of 
the  country  by  the  imposition  of  new  taxes,  among  which 
was  included  the  income-tax  under  the  name  of  a  property- 
tax.  The  greater  part  of  these  taxes  were  declared  to  be  of 
a  temporary  character,  and  were  to  cease  in  six  months  after 
the  re-cstablishmcnt  of  peace.  It  soon  became  apparent, 
however,  that  to  adhere  to  this  stipulation  would  be  impos- 
sible, since  the  exigencies  of  the  country  required  the  con- 
I  traction  of  loans,  the  interest  of  which  could  not  be  provided 
j  except  by  the  gradual  appropriation  of  one  portion  after 
I  another  of  the  proceeds  of  the  war  taxes.  Under  these  cir- 
cumstances it  was  proposed  in  1807  by  Lord  Henry  Petty, 
then  Chancellor  of  the  Exchequer,  to  depart  from  the  usual 
jpractice  of  conlining  the  financial  arrangements  to  the  cur- 
jrent  year,  and  to  determine  at  once,  as  far  as  was  possible, 
jthe  amount  which  it  would  be  necessary  to  raise  during  each 
jone  of  a  series  of  years,  providing  beforehand  the  means  for 
jmeeting  the  increasing  burden.  It  was  assumed  that  the 
lloans  to  be  raised  in  1807  and  the  two  following  years 
iBWildbe  each  £12,000,000;  that  for  1810  was  stated  at 
JiU,000,OOO,  and  during  each  of  the  ten  ensuing  years  the 
|amount  was  assumed  at  ^£16, 000, 000.     It  was  calculated 

10 


146 


ECONOMIC  HISTORY. 


that  the  interest  upon  those  loans  would  bo  met,  up  to  that 
for  the  year  1811,  by  the  falling  in  of  annuities,  after  which 
the  war  taxes  were  to  be  pledged  at  the  rate  of  ten  per  cent 
upon  each  loan ;  five  per  cent  to  pay  the  interest,  and  five  per 
cent  to  accumulate  as  a  sinking-fund  for  discharging  \h 
principal.  The  deficiency  that  would  be  occasioned  by  this 
oppropriation  year  by  year  of  the  war  taxes  wns  to  be  met  bv 
supplementary  loans,  for  the  interest  on  which,  and  to  iiri> 
vide  a  sinking-fund  for  their  redemption,  it  would  bo  nc  s- 
sary  to  impose  new  taxes.  By  these  means  it  was  expcctcil 
that  the  country  would  have  been  able  to  meet  the  charges  of 
an  expensive  war  during  a  scries  of  years  with  only  a  moder- 
ate addition  to  the  public  burdens.  The  ministry,  of  vhidi 
Lord  Henry  Petty  formed  a  part,  having  gone  out  of  oHiee 
before  the  next  annual  finance  arrangement  was  brought  for- 
ward, his  plan  was  abandoned,  and  no  attempt  has  since  been 
made  by  any  minister  to  form  financial  arrangements  em- 
bracing the  circumstances  of  future  years. 

The  explanations  offered  each  year  in  the  House  of  Com- 
mons by  the  Chancellor  of  the  Exchequer  concerning  tli? 
financial  condition  of  the  country  are  not  given  in  audi  a 
form  as  to  be  readily  understood.  In  the  accounts  by  whiili 
the  statements  are  accompanied,  the  interest  of  the  debt  ami 
other  permanent  charges  are  not  included,  and  on  the  other 
hand  nothing  is  stated  regarding  the  produce  of  the  perma- 
nent taxes,  forming  what  is  called  the  consolidated  fuiiil. 
except  the  amount  of  its  surplus  or  deficiency,  as  the  case 
may  be,  after  providing  for  the  permanent  charge  upon  it. 
The  Budget,  as  it  is  the  practice  to  call  this  annual  exposi- 
tion, explains  on  the  one  hand  the  sums  required  for  the 
public  service  during  the  year  under  the  different  heads  sf 
Navy,  Army,  Ordnance,  and  Miscellaneous  Services,  to- 
gether with  any  incidental  charges  which  may  ai)ply  to  the 
year ;  and  on  the  other  hand  are  given  the  ways  and  mwii 
for  meeting  the  same.  These  ways  and  means  consist  of  the 
surplus  (if  any)  of  the  consolidated  fund,  the  annual  duties. 
and  such  incidental  receipts  as  come  in  aid  of  the  national 
resources. 


FINANCES  OF  ENGLAND. 


147 


The  detail  of  these  budgets  would  consequently  throw  but 
little  light  upon  the  financial  condition  of  the  country,  if 
even  they  had  been  preserved  in  an  authentic  form,  which  has 
not  been  dune.  Any  statements  of  the  kind  that  could  be 
offered  must  be  drawn  from  unauthorized  publications,  in 
which  they  have  been  given  without  regard  to  methodical 
arrangement,  while,  as  respects  some  years  of  the  series,  wo 
should  seek  in  vain  for  any  statement  whatever. 


148 


ECONOMIC  HISTORY. 


VII. 

LA   POLITIQUE    COMMERCIALE  DE   LA 
RESTAURATION. 

From  Levasseur's  IIihtoire  deb  Classes  OuvRif:RE8  en  Fhasce 
DEi'uis  1789  JUSQu'A  N08  J0UR8.*  — Vol  I.  pp.  405-428. 


LES  lois  commcrcialcs  qui  dcvraicnt  6tro  priucipalcraent 
foiidt'cs  sur  Ics  bcsoins  de  la  consommation,  sunt  sub- 
ordonn^cs  en  rdalitd  h,  la  politique.  Faitcs  par  dcs  liumiucs, 
il  Icur  arrive  trop  souvent  de  porter  I'empreinte  dcs  passions, 
et  de  repr<isenter  moins  la  nature  des  rapports  {icononiiqucs 
d'une  nation,  que  les  intdrets  particuliers  et  lea  pr(;ji)g(is  de 
ceux  qui  la  gouvernent. 

II  n'cst  pas  de  lois  humaines  qui  soient   h,  I'abri  de  ce 
ddfaut ;  mais  il  n'en  est  peut-etre  pas  qui  en  soioiit  plus 
ordinairement  affectdcs  que  les  lois  relatives  au  commerce 
extdrieur.    La  Rdpublique  et  I'Empire  s'dtaient  acliarn(;s  a 
la  lutte  centre  les  Anglais  ;  la  l<$gi8lation  douanierc  fut  alors 
armde  en  guerre  et  hdrissiJe  de  prohibitions  belliqiieiiscs:  le 
but  dtait  d'dcarter  I'ennemi  de  la  place.    La  Restauration  fut 
pacifique,  mais  obligde  de  se  concilier  les  grands  proi)ri^taiics 
et  les  grands  manufacturiers  i\\\\  formaient  la  majorit<i  de  la 
Chambre;  la  legislation  douanicJre  se  pliant  k  leurs  cxigencf^' 
continua  h  se  hdrisser  de  prohibitions  mercantiles  et  (Jgoist 
le  but,  cette  fois,  dtait  de  rdserver  le  marchd  h  ceux  qui  fa 
saient  la  loi. 

Le  systeme  continental  dtait  devenu  odieux  aux  populations. 
II  dtait  certain  que  le  nouveau  gouvernement  commencerait 
par  le  renier.  D'ailleurs  la  force  des  choses  y  poussait.  A  la 
suite  des  armies  dtrang^res,  ^taient  entries,  dans  nos  ports 

1  Paris :  L.  Hachette  et  Cie,  1867. 


LA   POLITIQUE  DE  LA   RESTAUR  ATI  OX. 


149 


ot  par  toiitcs  nos  frontifircs,  Ics  donrdcs  coloiiiulcs  et  Ics 
luaroliainlises  aiiglaises.  Les  prix  avaicnt  dprouvd  uno  r<5vo- 
lutioii  SDiidaino,  et  Ton  voyait  se  produiro  cctte  bizarrerie,  que 
lo  Sucre,  par  excmple,  se  vcndait  commundmcnt  38  sous  la 
livre  ail  uiomcat  oil  la  loi  le  frappait  encore,  en  droit,  d'une 
t;i\c  dc  44  sous,  et  einpechait  ainsl  les  ndgociants  dc  rctirer 
los  approvisionnements  qu'ils  avaient  dans  les  entrepots :  il 
etait  impossible  de  inaintenir  la  loi.  Les  Anglais  d'ailleurs, 
(lonts  ics  ddsirs  dtaicnt  alors  des  ordres,  en  soUicitaient  le 
rappcl.  Peu  de  jours  aprds  son  entrde  ii  Paris,  le  conite 
d'Artois  8in;na  deux  ordonnances,  Tune  qui  supprlmait  les 
Cours  ]ir(!Votales,*  I'autre,  qui  levait  les  obstacles  mis  au  com- 
merce maritimo.2  Lea  taxes  prohibitives  furent  remplacdes 
par  un  droit  trfis  mod(;rd  sur  le  sucre,^  et  le  cafd  et  par  un 
simple  droit  ac  balance  sur  les  cotons  en  laine. 

Cettc  mesure  se  lieurta  contre  une  double  opposition. 
L'adniinistration  impdrialc,  formde  ^  I'dcole  de  la  prohibition, 
sYtait  habitude  dcpuis  treize  ans  i\  en  pratiquer  les  maximcs  ; 
olle  dtait  en  gdndral  imbue  de  I'esprit  du  syst^rae  et  d'autant 
moins  disposde  h  y  rcnoncer  que  I'ingdrence  de  I'fitat  dans 
les  affaires  connnerciales  lui  donnait  plus  d'importance.  De 
leur  cotd,  les  grands  industriels  dtaient  ddsireux,  comme  tou- 
jours,  do  [)rivildges  et  partisans  des  restrictions  douanidres. 
Mai3  lis  dtaicnt  peut-6tre  plus  excusables  qu'i  d'autres 
epoqucs,  parce  que  leurs  intdrfits  dtaient  plus  que  jamais 
ancrds  sur  le  fond  de  la  prohibition.  Grace  h  leurs  richesses, 
ils  dtaicnt  appolds  v\  reprdsenter  I'industrie  fran<jaise,  et,  par 
"iif"  "  'Z  ordinaire,  disposds  k  prendre  leurs  intdrSts 

lis  allaicnt,  avec  lea  grands   propridtaires, 
.1.^        ditions  aux  miniatres. 

stavi.ition  se  trouva  placde  entre  les  deux  pouvoirs 
d?  1  jioque,  ['administration  et  la  Chambre,  qui  voulaient  la 
1'  'ctiun,  Tune  par  habitude,  I'autre  par  calcul.  La  protec- 
tiuii  tiiompha ;  les  tari  prirent  un  nouveau  caractdre  non 
moins  exclnsif  sur  cert      s  points  que  celui  de  I'Empire,  et 

>  Ord.  du26avri         4. 

"  Ord.  du  23  avril,  .     I.    Voir  le  Moniteur  de  1814,  p.  461. 

'  Le  Sucre  fut  taxe      >  sous  la  lirre. 


ij 

« 

150 


ECONOMIC  HISTORY. 


d'ailleurs  beaiicoup  plus  dangereux;  parce  qu'on  pr^tendit 
driger  en  un  systeme  commercial  r^lgulier,  ce  qui  n'avait  ^U 
jusque-lil  qu'une  consequence  regrettde  de  I'^tat  de  guerre. 

La  r^forme  du  comte  d'Artois  souleva  une  tempete  de  recla- 
mations. On  aurait  pu  croire  que  les  manufacturiers  seraient 
satisfaits  de  se  procurer  la  matiOre  premiere  k  bon  march^, 
II  n'en  fut  rien.  L'intdret  du  present  les  aveuglait  assez  sur 
Tintdret  de  I'avenir,  pour  que  les  cotonniers  de  I'ouest  et  du 
nord,  se  pr^tendissent  ruin^s,  parce  que  I'abaissement  des 
droits  sur  le  coton  allait  diminuer  d'autant  la  valcur  dcs 
dtoffes  qu'ils  avaient  en  magasin.  lis  pdtitionnerent,  kn- 
virent  qu'une  "  immense  population  serait  rdduitc  au  ddses- 
poir,"  que  "  la  prohibition  est  de  droit  politique  et  social,"  et 
que,  depuis  le  fabricant  jusqu'a  Touvrier,  tous  ont  "  le  droit 
de  fournir  exclusivement  h  la  consommation  du  pays  qu'ils 
habitent."  ^  lis  demandaient  30  millions  d'indemnitd,  et  la 
prohibition  des  fils  et  des  tissus  de  coton :  lis  obtinrent  la 
prohibition. 

Les  maitres  de  forges  ^levaient  d'autres  pretentions.  L'Em- 
pire  n'avait  imposd,  il  est  vrai,  qu'une  taxe  modique  de  44 
francs  par  tonne  (1000  kilog.)  sur  les  fers  en  barre.  Mais  la 
guerre  formait  une  barridre  plus  difficile  h  franchir  que  les 
douanes  et  durant  vingt  ans  les  hauts  fourneaux  du  conti- 
nent n'avaient  pas  eu  k  rcdouter  les  fers  anglais.  Apr^s  la 
paix,  ils  se  trouv^rent  tout  k  coup  surpris  par  une  concur- 
rence qui  livrait  ses  produits  a  30  ou  40  pour  100  au-dessoiis 
des  prix  ordinaires,  et  par  une  crise  commerciale  qui  paraly- 
salt  la  vente.  Vives  reclamations.  Les  maitres  de  forges 
voulaient  sinon  une  indemnity,  au  moins  le  sequestre  irain^- 
diat  des  fers  qui  etaient  encore  en  entrepOt  et  la  prohibition 
des  fers  strangers ;  ils  obtinrpnt  le  quadruplement  du  droit 
qui,  decime  compris,  fut  porte  k  165  francs,  taxe  reprto- 
tant  environ  50  pour  100  de  la  valeur  de  la  marchandise  en 
entrepot.^ 

Le  baron  Louis  n'avait  pu  r^sister  k  I'orage.  Cependant  il 
ne  dissimula  pas  que  le  gouvernement  approuvait  pen  I'esprit 

>  Voir  aux  Arch,  de  I'Emp.,  I'original  d'une  de  ces  petitions  (25  arril,  18H)' 
'  Voir  M.  Am^,  Tarifs  des  douanes,  cliap.  xviii. 


LA  rOLITIQUE  DE  LA  RESTAURATION. 


151 


de  monopole  des  manufacturiers.  "  Les  prohibitions  absolucs 
ddtruiscnt  I'^jmulation.  Aussi  esp^rons-nous,"  ajoutait-il, 
"pouvoir,  aux  sessions  prochaines,  demander  la  reduction  suc- 
cessive du  tarif  que  nous  proposons  aujourd'hui  sur  Ics  fers."  * 
11  sc  faisait  illusion.  Les  int^rets  sont  plus  tenaces.  lis  se 
prdcipiterent  h,  la  curde,  rdclamant  k  I'envi,  qui  pour  les 
colons,  qui  pour  les  dleveurs,  qui  pour  les  manufacturiers ; 
ct  cc  que  cliacun  d'cux  obtint  k  titre  de  faveur  passagere,  il 
prdtcndit  le  conservcr  comme  une  propridtd,  il  s'cn  fit  memo 
1111  titre  pour  obtenir  de  nouveaux  avantages.  Cost  ainsi  que 
Ics  iois  protcctionistes  se  succedSrent  et  8'aggrav(^rent  de 
session  on  session. 

Le  gonvernement  songeait  h,  fairs  une  refonte  gdndrale  du 
tarif.  II  n'cn  cut  pas  le  loisir  en  1814,  et  se  contenta  de  pre- 
senter un  projet  par  lequel  il  autorisait  le  transit,  donnait  au 
pavilion  fran^ais  la  faveur  d'une  surtaxe,  et  relevait,  mais  k 
un  taux  encore  tres  moddrd,  certains  droits  abaissds  par  I'or- 
donnance  du  23  avril.^  II  s'excusait  de  ne  pas  faire  plus, 
parce  que  les  douanes  venaient  k  peine  d'etre  rdtablics,  et  il 
hasardait  timidemcnt,  que  "  d'ailleurs  le  bon  marchd  provo- 
quait  la  consommation."  Tel  n'dtait  pas  I'avis  de  la  Cham- 
bre,qui  vota  la  loi,^  mais  en  donnant  une  le^on  aux  ministres. 
"  En  principe  d'dconomie  politique,"  disait  le  rapporteur,  "  les 
douanes  sont  Stabiles  pour  assurer  la  pi'ospdritd  des  manufac- 
tures, pntir  faire  fleurir  I'industrie  nationale.  EUes  sauvent 
le  commerce  en  donnant  aux  fabricants  frauQais,  par  des  pro- 
hibitions ou  des  droits  sur  les  productions  de  I'industrie 
I'trangere,  Tavantage  de  la  concurrence  dans  le  marchd  in- 
ti'iicur;  elles  sont  utiles  au  consommateur  en  lui  assurant  k 
moindre  prix  les  merchandises  qui  se  fabriqncnt  extdrieure- 
ment  avec  des  maliSres  premieres  indigenes,  que  I'dtranger 
accaparerait,  sans  la  prohibition  k  la  sortie.  .  .  .  L'institution 
deviendra  rdcllemcnt  nationale,  lorsque  la  combinaison  des  dif- 
f^rents  r^glements  sera  parvenue  au  point  d'activer  dans  les 

>  M.  Ame,  Tarifa  des  douaneB,  p.  62. 

3  De  40  k  60  francs  par  quintal  nic'trique  sur  le  sucre  brut, 
60     "       "        "  "        BurlecaW, 

100     "       "        "  "       turle  cacao. 

>  Loi  du  17  ddcembre,  1814. 


152 


ECONOMIC  HISTORY. 


mains  d'un  million  d'ouvriers  I'instrument  qui  les  nourrit, 
lorsque  cettc  combinaison  repoussera  par  dea  prohibitions 
n<ices8airos  les  raarchandises  ^trangdres  dont  rcntr<;e  poilerait 
prejudice  aux  marchandises  de  mSme  espdcc  qui  se  fabriquent, 
se  vcndent  et  se  consomment  dans  I'intJ^rieur."  * 

Le  ministdre  comprit  la  le9on,  promit  de  rddigcr  ses  loisde 
douane  cu  vue  de  la  protection,^  et  pr^senta,  en  1816,  un  nou- 
veau  projet  pour  refondre  le  tarif  de  1806,  qui,  jusque-lii, 
n'avait  subi  que  des  modifications  de  ddtail.  II  proposait  des 
droits  plus  forts.  La  Chambre  les  renfor^a  encore,^  accep- 
tant,  sans  en  pescr  la  valeur,  les  arguments  quelquefois  singu- 
liers  que  suggdraient  les  int(;ret8  ou  les  pr^jugds.  Un  ddput^ 
declarait  la  ceruse  de  Clichy  excellente  pour  la  consomma- 
tion,  sup^rieure  mdme,  de  I'avis  de  tout  le  monde,  ^  cclle  de 
HoUande;  mais,  ajoutait-il,  le  vulgaire  veut  le  cacliet  des 
manufactures  dtraugeres  ;  "  pour  I'en  ddgouter,  il  demandait, 
et  il  obtint  un  droit  dnorme  sur  la  ceruse  ^trangdre."^  Un 
autre  voulait  qu'on  imposat  fortement  le  tb<5,  parce  que  les 
Anglais  le  fournissent,  et  que  "  c'est  autant  de  numeraire  qui 
sort  de  France."  **  Sur  la  demande  des  agriculteurs,  la  pro- 
hibition des  peaux,  k  la  sortie,  fut  levde  d'une  part,  ct  d'autre 
part,  rentr(;e  des  eaux-de-vie,  autres  que  de  vin,  fut  prohiWe. 
On  r(^tablit,  en  pleine  paix,  les  rigueurs  de  la  legislation  pr^- 
vOtale,  et  Ton  autorisa  la  recherche  et  la  saisie  ^  rint^rieur 
des  dtoffcs  prohibdes.^ 

La  Chambre  introuvable  fut  dissoute.  Mais  le  cabinet  eiit 
besoin,  en  1817  comme  en  1816,  de  s'appuyer  sur  une  ma- 
joritd  qui,  si  elle  ne  professait  pas  los  memes  sentiments  poll- 
tiques,  avait  en  agriculture  et  en  Industrie  les  mSmes  intdrets 

1  Rapport  de  Mnatnid-Grandprez,  Moniteur  de  1814,  p.  1253. 

2  Monileur  de  1815,  p.  1263.  j 
'  Le  gouverncmcnt,  par  exemple,  proposait  de  cnJer  un  entrepot  h  Lille. 

Les  deputes  des  ports  de  mer  se  r^criferent  et  flrent,  aprfes  un  long  debat,  sup- 
primer  I'article. 

♦  Mn,r:teur  de  1816,  p.  440. 

«  Ibid.,  p.  439. 

«  Loi  rfii  28  avril,  1816.  — Art.  59.  A  dater  de  la  publication  de  la  prfMH« 
loi,  les  cotons  fll^s,  les  tissus  et  tricots  de  coton  et  de  laine  et  tous  autres  tlMU! 
de  fabriques  ^trang^res  proliib^s  seront  recherch^s  et  saisis  dans  toute  i'^tendue 
du  royaurae. 


LA   POLITIQUE  DE  LA  RESTAURATION. 


153 


et  les  memes  exigences.^  La  legislation  commcrciale  se  sentit 
done  pea  chi  souffle  liberal  qui  inspirait  alors  le  gouverne- 
mcnt.  Lorsqne  la  question  des  tarifs  se  produisit  k  la  session 
de  1817,  In  directeur  g<;n<jral  des  douanes  se  coutenta  de 
glisser  timidcment  un  <51oge  platonique  de  la  liberty  des 
dchanges,2  tQ^t  en  declarant  aussitot  ne  vouloir  porter  aucune 
atteintc  nii  systeme  prohibitif, "  qu'il  est,"  ajoutait-il, "  sage  de 
respecter  anssi  longtemps  que  nos  manufactures  se  croiront 
fondces  a  Ic  considorer  comme  Icur  plus  sollde  appui." 

Lcs  dopiitos  voulaient  non-seulement  le  respecter,  mais  le 
fortifier.  Lcs  propridtaires,  en  faveur  des  raaitres  de  forges 
ausquels  ils  vcndaicnt  Icur  bois,  cherchaient  k  ^carter  la  con- 
currence des  fers  dtrangers,  et  ne  prenaient  gucrc  la  peine  de 
dissimuler  Ic  mobile  qui  les  faisait  agir.^  Les  industriels, 
peusaiit  que  "  la  prospdrit^  des  manufactures  pent  seul  pro- 
curer des  consommateurs  utiles  ^  Tagriculture,"  *  voulaient 
qu'oii  supprimftt  tout  droit  d'entrde  sur  lcs  matiercs  premieres, 
ct  le  directeur  g(;n(iral  avait  quelque  peine  a  defendre  les  in- 
terC'ts  du  fisc.  La  loi  du  27  mars,  1817,  ajouta  quelques  re- 
strictions nouvclles  an  commerce  ext(irieur. 

Cclle  du  21  avril  1818  fut  le  sujct  d'un  curicux  d<;bat. 
Avant  1789,  lcs  provinces  d'etranger  effcctif  n'dtant  pas 
comprises  dans  la  circonfdrence  des  douanes,  commcr^aient 
librenicnt  avcc  lcs  pa3-s  voisins ;  I'Alsace  (itait  du  nombre,  et 
avait  gajj^nd  cinq  millions  par  an  au  transport  des  marchan- 
dises  entrc  rAllcmagne  et  la  Suisse.  La  Rdvolution,  en  por- 
tant  la  ligne  des  douanes  ^  la  frontidre,  avait  interrompu  ces 

'  Cependdiit  le  rapporteur,  Morjjnn  de  Belloy,  parla  avec  modcTation  ot  fit 
lesvffiux  pour  I'entier  affrancliissement  do8  niatieres  premieres  que  lea  circon- 
siances  ne  licrmettaient  pas  de  de'gre'ver.  —  Mtniteur  de  181G,  p.  291 ;  voir  aussi 
ia  loi  qui  flit  promulgui'e  le  28  avril,  1816. 

'^  Sans  doute  il  est  louable  d'annoncer,  liaut'.'ment  le  dt'sir  de  oette  lieurcuse 
ro'voliition  dans  le  systfeme  commercial  du  monde ;  mais  nous  n'aurons  pas  la 
liariliesse  de  vous  conseiller  d'en  devancer  I'e'poque.  —  Moniieur  de  1817, 
p.  Uti. 

'  Le  giieral  Augicr  proposait  \m  amendement  pour  porter  de  20  k  30  fr.  par 
I'ltkii.  Ic  droit  imposd  par  la  loi  du  21  de'cembre,  1814,  sur  les  fers  lamine's,  que 
lis  (Strangers  fabriquaicnt  par  des  proc<!de'8  ^conomiques.  —  Moniteur  de  1817, 

p.  286. 

'  Moniteur  de  1817,  p.  278.    Diacoure  du  comte  Beugnot. 


154 


ECONOMIC  HISTORY. 


relations ;  TEmpire,  par  ses  prohibitions  contre  le  commerce 
maritime,  les  avait  en  partie  renou^es;  mais,  depuis  1815,le 
b<$ndfice  en  avait  pass^  au  grand-duch€  de  Bade.  L' Alsace 
r^clamait.^  Le  projet  de  loi  donnait  enfin  satisfaction,^  en 
autorisant  par  divers  bureaux  le  transit  de  certaines  mar- 
chandises  et  surtout  dcs  denrdes  coloniales.  AussitSt  les 
ports  de  raer,  ddfenseurs  ordinaires  de  la  libcrtd  commerciale 
quand  elle  servait  les  int<5rets  particuliers  de  leurs  armateurs, 
s'^crierent  qu'en  permettant  le  passage  des  dcnrdcs  coloniales, 
on  facilitait  les  ventes  des  Hollandais  en  Suisse,  au  ddtriraeut 
de  la  marine  fran^aise  qui  avait  la  pretention  de  fournir  seule 
le  Sucre  et  le  caf^  Jk,  la  Rdpublique  helv<5tique.  En  vain  I'ad- 
ministration  prouva-t-elle  surabondamment  qu'il  s'agissait 
seulement  de  faire  prendre  aux  marchandises  la  rive  gauche 
du  Rhin  au  lieu  de  la  rive  droite,  et  que  les  Hollandais  n'en 
vendraient  pas  une  caissc  de  plus  Ji  la  Suisse,  ni  nos  ports 
une  caisse  de  moins.^  La  commission  rejeta  Tarticle ;  et  la 
Chambre,  malgrd  les  protestations  des  repr^sentants  de  I'Al- 
sace,  vota  sa  commission.  Ce  fut  seulement  un  an  plus  tard, 
h,  la  suite  d'une  enquete,  que  le  ministdre,  persistant  Jans  son 
dcssein,  parvint  h  faire  voter  le  transit  par  I'Alsace,  ft  la  faible 
majority  de  17  voix  sur  195  votants.* 

(/'est  par  le  mSme  ministere  que  fut  pr^sent^e  la  premiere 
loi  constituant  en  France,  k  I'image  de  I'Angleterre,  le  systeme 
de  VSchelle  mobile.  "  L'int^rgt  de  la  propridt^  et  de  I'industrie 
agricole  "  l' avait  dict^e.  Pour  la  premiere  fois,  les  restrictions 
douanidres  relatives  au  commerce  des  cdrdales  furent  dirigi^os. 
non  plus  contre  I'exportation  comme  on  I'avait  fait  par  le 
pass^,  mais  contre  I'importation ;  ^  il  fallait  que  les  marches 

^  Voir  les  voeux  du  Ras-Rhin,  sessions  des  Cons  '•'■  g^ndraux  de  1817 ctde 
1818.  En  1810,  le  Conseil  g^ndral  se  plaignit  que  let  -onditions  faites  au  trail' 
sit  f ussent  trop  oncreuses.  Dans  les  ann€ps  suivantes,  ce  fut  le  tour  des  de'parte- 
nients  de  I'anciennc  Lorraine  qui  r(fclanibrent  de  m€me  b^n(?flce  que  I'Alsace. 

"  Article  34  du  projet. 

•  Voir  M.  Atne,  Etutk  ironotnique  sur  le  tnrifdes  douanes,  p.  84,  et  Ic  MomW 
de  1818,  p.  333.  Le  rapporteur  Morgan  de  Belloy  parle  "  des  alarmes  des  n^go 
ciants  des  ports  qui  ont  k  se  prdvaloir  de  la  possession  et  des  lois  solennelles' 

*  Loi  du  26  mai,  1810. 

>  Cctte  loi  du  16  juillet,  1810,  ^tablissait  k  I'importation  un  double  dmit; 
droit  fixe  de  26  centimes  par  quintal  de  grains  pour  Ics  navires  franf ait,  de  1  (^ 


LA  POLITIQUE  DE  LA  RESTAURATION. 


155 


restassent  aux  fermiera  nationaux,  dut  le  peuple  payer  cher 
sa  subsistance. 

La  nature  d^joua  les  calculs  dea  Idgislateurs.  La  r^colte 
fut  abondante,  et  les  prix,  que  la  disette  de  1816  avait  fort 
exa''(5r<;s,  baisserent.  De  nouvelles  reclamations  se  firent 
entendre,  d'autant  plus  vives  qu'elles  dtaient  plus  sures  d'etre 
favorablcment  ^coutdes  sous  radministration  du  comte  de 
Villele.  On  accusait  I'importation.  Verification  faite,  il  se 
trouva  que  ectte  importation  avait  ^  peine  excddd  I'expor- 
tation  de  700,000  hectolitres.  On  se  rcjeta  sur  I'effet  moral 
des  arrivages  qui  intimidaient,  disait-on,  la  hausse. 

II  fallut  une  nouvelle  loi,  qui  donnat  de  nouvelles  facilitds 
i  I'exportation  et  mit  plus  obstacles  ^  I'importation.  Pr^- 
scntde  dans  la  session  de  1821,  par  le  miniature,  remanide  et 
considdrablcment  aggravde  par  la  commission,  elle  fut  votde 
par  une  nombreuse  major itd.^ 

On  se  fdlicitait  de  mettre  ainsi  les  agriculteurs  k  I'abri  de  la 
concurrence.  On  n'oubliait  qu'une  chose ;  I'intdret  des  masses 
dont  le  pain  est  le  principal  aliment.  II  est  vrai  qu'un  ddput^ 
^tait  venu  soutenir  que  la  chertd  du  pain  dtait  un  bien  pour 
le3  ouvric^rs,  parce  qu'elle  les  obligeait  ^  travailler  avec  plus 
(I'ardeur  pour  vivre.  Mais  cette  singulidre  thdorie  trouva  peu 
docho ;  les  propridtaires  n'avaient  aucune  intention  d'affamer 
la  classe  ouvriere :  seulement  ils  songeaient  ^  eux-mCmes. 
Benjamin  Constant  le  leur  fit  sentir.  "  Je  me  bornerai,"  s'dcri- 
ait-il,  interrompu  par  les  murmures  de  I'assemblde,  "  je  me 


25  pour  les  nixvircs  c'trangers ,  droit  variable  de  1  franc  par  chaque  franc  de 
baisse  des  qu'on  descendait  dans  les  trois  regions  de  la  France  audessous  deB 
prix  nnrmaiix  de  23,  21,  et  18  francs ;  a  la  limite  de  20, 18,  et  16  francs,  toute 
importation  c'tait  interdite.  La  loi  fut  vote'e  k  une  majoritc'  de  234  voix 
cuiitre  28. 

'  I'ar  282  voix  contre  54.  Dans  cetle  loi  du  4  jnillet  1821,  la  taxe  variable 
cninmoii(;ait  a  C-tre  |)er(,Mie  qtiand  les  prix  e'taient  k  26  francs  dans  la  premibre 
classe,  a  20  dans  la  derniere,  et  les  importations  cessaient  au  taux  de  22  et  de 
iS  francs.  L'eciielle  mobile  k  I'importations  fonctionnait  entre  26  et  18  francs, 
Lfsta dire  qiiVile  fut  e'ievc'e  de  2  francs  au-dessus  de  la  limite  de  1819.  L'ex- 
portation,  au  contraire,  permise  seulement  jusqu'k  23  fr.  par  la  loi  de  1819,  eut 
•5  francs  pour  limite  en  1821 :  double  avantage  pour  les  agriculteurs,  qui  pou- 
^aient  exporter  plus  longtemps,  et  qui  e'taient  plus  tdt  k  I'abri  de  la  concurrence 
etrangfere. 


166 


ECONOMIC  HISTORY. 


III    ' 


borncrai  ^  vous  dire  qu'il  est  facheux  de  voir  que  vous  faites 
reucherir  les  denr^cs  que  vos  terres  produisent  et  dont  vos 
grcniers  8ont  remplis."  * 

Cependant  les  effets  ne  r^pondirent  pas  h,  I'attente  dos  pro- 
pridtaires.  Le  bid  baissa  pour  aiiisi  dire  d'annde  en  ann(;e: 
il  tomba  k  14  fr.  80  cent.,  en  182-3.  Les  tarifs  n'y  faisaient 
rien.  Pourtant  ils  dtaicnt  rigoureux ;  car  durant  les  neuf 
anndcs  qui  s'dcoulerent  de  la  publication  de  la  loi  a  la  r<!volu- 
tion  de  juillet,  I'importation  ne  I'ut  permise  que  pendant  un 
seul  mois,  en  fdvricr,  1828.  On  ne  pouvait  aggravcr  le  tarif. 
Mais  ''  pour  calmer  I'opinion,"  on  porta,  en  1825,  une  loi  qui 
8up|)riniiut  I'entrepQt  fictif  des  grains. 

L'dvdncment  qui  avait  prdcij)itd  la  chute  du  ministerc,  d^]^ 
chancelant,  dans  lequel  le  corate  Decazes  avait  tentd  iin  ra[j- 
prochcment  entre  les  convictions  royal istcs  et  les  principos 
libdraux,  n'dtait  pas  de  nature  adoucir  le  rdgime  douanier. 
Les  grands  propridtaires  prirent  une  influence  plus  decisive  et 
le  systemc  protecteur  se  consolida :  tdmoin  la  loi  de  1821  siir 
les  cdrdales.  Les  intdressds  ne  se  lassaient  pas  de  deinaiidcr, 
et  chaque  concession  faisait  naitre  de  nouvellcs  cxi<rciices 
qui  se  produisaicnt  h,  la  tribune,  dans  les  pdtitions,  dans  les 
voeux  des  conseils  gdndraux.  Tout  argument  leur  etait  bon. 
L'industrie  languissait-clle ;  ils  ddclaraicnt,  commc  les  maitrcs 
de  forges  de  la  Haute-SuOne,  qu'ils  dtaient  menacds  de  mine 
par  I'introduction  trop  facile  des  fers  dtrangers  et  cicmaii- 
daicnt  qu'on  renfor^at  les  barriercs.'''  L'industrie  prospc'iait- 
elle ;  ils  declaraient,  comme  les  fabricants  de  Saint-QiKiitin, 
qu'il  importait  "  au  progres  de  l'industrie  manufacturit'ie  de 
la  rassurer  completement  sur  le  maintien  des  lois  pioliibi- 
tives."'^  Pour  la  vente  h,  I'intdrieur,  les  ddpartenicnis  postu- 
laient  k  I'envi  les  fourniturcs  de  I'Etat,*  et  I'esprit  d'excliisiou 
dtait  tel  que  qucl(ines-uns  eussent  volontiers  relevd  les  barri- 
6res  du  moyen  fige  au  profit  des  manufactures  provinciales: 
le  Loir-et-Cher  vonlait  qu'on  fit  exclusivement  "  habiller  les 

»  Mnnitenr  du  .30  Mvril.  1821. 

8  Hniitp  Sni'me  —  V«imix  des  Const-ils  generaux  en  1819. 

•  Aisne.  —  Voeux  des  Conseils  ne'ne'raux  en  1826. 

♦  Voir  He'rault  en  1818,  Pyronees-Orieu  tales  en  1821,  Aveyron  en  1825,  etc. 


LA  POLITIQUE  DE  LA  RESTAURATION. 


157 


soldats  dc  la  legion  de  Loir-et-Cher,  avec  des  draps  et  autres 
^toffcs  de  la  fabrique  de  Romorantin.* 

Dans  une  telle  disposition  des  esprits,  le  tarif  ue  satisfaisait 
jamais  toutes  les  cupidit^s.  II  fut  remaiii^  par  des  lois  pres- 
qtie  consecutives  rendues  eu  1820,  en  1822,  en  1826,2  g^jg 
compter  les  projets,  qui  n'aboutirent  pas  et  les  ordonnances 
(lui,  dans  I'intervalle  des  sessions,  aggrav^rent  plusieurs  taxes. 
L'administration  ellc-meme  se  fatigua,  et,  en  1822,  le  direc- 
toiir  <:()n<)ral  osa  f<jliciter  ironiquement  les  ddput^s  de  n'avoir 
apporto  aucun  changcraent  k  la  loi  des  douancs  dans  le  coura 
de  ranuec  prdc^dente.  "  C'est,  disait-il,  un  avantage  que  nous 
aimerions  h,  voir  se  r^pdter.  Les  lois  de  duuanes  veulent  etre 
stables."  ^    Les  ddput^s  pensaient  autrement.* 

Apres  les  grains,  la  question  principale  k  la  Chainbre  ^tait 
cello  des  fers,  qui  r^unissait  dans  un  meme  int^rSt  les  direc- 
teiirs  des  usines  et  les  propridtaires  des  bois.  La  loi  du  17 
d(?cembie,  1814,  avait  ^lev^  les  droits  sur  les  fers  de  toute 
espece ;  niais  dans  la  repartition  des  faveurs  du  tarif,  les  aciers 
avaiont  <3te  les  moins  favorisds.  lis  rdclamerent,  au  nom 
meme  dc  leurs  progres,^  et  la  loi  du  7  juin,  1820,  fit  droit  ^ 
lours  plaintes  en  augmentant  les  taxes  de  45  k  60  pour  100 : 
c'etait  flapper  directement  les  instruments  indispensables  au 
travail,  limes,  faux,  outils.  Mais  il  entrait  dans  le  systSme 
la  Chambrc  de  prdfdrer  I'intdret  du  producteur,  intdret 


ae 


imm(!diat,  exigeaut,  calculant  son  profit  par  grosses  sommes, 
a  I'int^ret  du  consommateur,  dont  la  perte  seml)lait  Idg^re 
parce  ([u'elle  se  r(jpartissait  sur  un  grand  nombre  de  tStes. 

La  meme  loi  facilita  la  sortie  des  laines  indigenes  et  mit  un 
Ji'uit  a  I'entr^ie  des  laines  ^trang^res.  Les  fabricants  de  drapa 
fueut  une  opposition  vive.    Mais  cette  fois  encore  la  cause  de 


'  Session  de  1819. 

2  Loi  (111  7  juin,  1820 ;  loi  du  27  juillet,  1822 ;  loi  du  17  mai,  1826. 

'  Mmhew  de  1822,  p.  86. 

* "  Souinettre  les  douanes  k  une  rfegle  invariable,  c'est  leur  interdire  les  pro- 
gres  qu'uiie  louable  emulation  aspire  sans  cesse  favoriser."  —  Monileur  de  1820, 
p  021),  IjRpport  (le  Morgan  de  Belloy. 

'  Le  jury  des  arts  leur  h,  rendu  les  plus  honorables  t^moignages  et  la 
grande  nmjorite'  de  votre  Commission  k  pens^  qu'il  convenait  de  leur  accorder 
I'encouragement  de  nouveaux  droits.— Jfwwteur  de  1820,  p.  56. 


Vrii  '■ 


158 


ECONOMIC  HISTORY. 


la  production,  fortifi^e  de  I'int^ret  agricole,  Pemporta  but 
rint^ret  des  consommateurs ;  ^  ot,  loraqu'aprds  une  longue 
discussion  qui  avait  eu,  comme  toujours,  pour  r^sultat  d'ag- 
graver  lea  taxes  primitives,  le  vote  d'ensemble  eut  lieu,  il  se 
trouva  dans  Turne  185  boules  blanches  centre  une  seule  boule 
noire.*  Les  d^put^s  ne  purent  s'empecher  de  rire ;  il  y  avait 
alors  sur  la  question  du  systdme  protecteur  une  parfaite  en- 
tente entre  les  partis. 

L'accord  ^tait  devenu  moins  unanime  en  1822.  Le  pHx 
des  fcrs  fabriqu^s  au  bois  et  au  marteau  avait  baissd  par  un 
de  ces  accidents  frdquents  du  march^,  dont  on  doit  s'applaudir 
quand  ils  ont  pour  cause  une  production  plus  ^conomiquc.^ 
NouvcUes  dol^ances  des  mattres  de  forges  qui  s'en  prirent 
k  I'importation,  et  obtiurent  une  ordonnance  auginentant  les 
droits.  Aussit6t  des  reclamations  de  tout  genre  assaillirent 
le  ministere  qui,  bien  que  peu  dispose  h  remanier  les  tarif3,dut 
c^der,  en  declarant  que  I'lntdret  du  fisc  ^tait  cette  fois  tout 
k  fait  stranger  k  la  mesure.*  II  pr^senta  un  projet  qui,  comme 
le  disait  le  baron  de  Saint-Cricq,  dans  I'expos^  des  motifs, 
avait  pour  but  "  de  protdger  et  pour  cela  d'encourager  par  de 
forts  droits  sur  les  produits  du  dehors,  de  d^fendre  meme 
par  des  prohibitions  toutes  les  exploitations  du  sol,  tous  les 
efforts  do  I'industrie."  Vouloir  prot^ger  tout,  c'eut  did  ne 
rien  prot^ger. 

N^anmoins,  la  Chambre,  trouvant  le  projet  insuffisant,  le 
refondit.  Le  rapporteur  de  la  commission  ^tait  Bourienne, 
Celui-ci  professait  comme  principe  dconomique  que  le  peuple 


1  Le  projet  niinisteriel  avait  mis  un  droit  de  20  pour  100,  au  lieu  de  la  pro- 
hibition, pour  les  cli^Ies  cachemires,  parceque  cette  prohibition  ctait  tout  i  fait 
illusoire.  L'assemble'e  ro'tablit  la  proliibition ;  cette  fois  les  fabricants  de  lai- 
nage  appuyferent,  et  la  Chambre  vote  a  I'unanimite'.  —  Moniteur  de  1820,  p.  56". 

a  Moniteur  de  1820,  p.  626. 

'  Les  fers  au  bois  ou  au  marteau  ctaient  tomb^s  de  400  k  600  francs  la  tonne 
par  suite  de  la  concurrence  des  fers  a  la  houille  ou  la  laminoir. 

*  "  Les  autres,"  disait  Ic  baron  de  Saint-Cricq,  "  modiflent  quelques  articles  da 
tarif,  non  dans  I'interet  du  Trdsor ;  car  plusieurs  taxes  subissent  une  reduction, 
et  I'augmentation  proposce  sur  quelques  autres  aura  pour  eftet  d'attc'nuer  la 
recettes  en  restreignant  I'importation  des  objets  qui  en  seront  graves,  nu' 
dans  la  seule  vue  de  satisfaire  it  des  interets  nouveaux  ou  mieuz  constates-  -' 
Moniteur  de  1822,  p.  79. 


LA  POLITIQUE  DE  LA   RESTAUR ATION. 


159 


«<  le  plus  riche  ^tait  tonjoura  celui  qui  exportait  le  plus  et  qui 
importait  Ic  inuins."  11  en  d^veloppait  les  consequences  par 
At-a  nriruments  que  I'Assembl^e  eut  sans  doute  moins  approu- 


Y<!s  si  die  cut  6t6  plus  d^sinteress^e.  *^  Les  lois  de  douanes," 
disait-il, "  en  favorisant  et  en  satisfaisant  un  grand  nombre 
d'intt'it'ts  gen(iraux,  blesscnt  quelques  intdrets  particuliers ; 
mais  c'est  ua  ami  inevitable,  et  lorsqu'il  est  bien  demontr^ 
([u'luie  mesurc  est  utile  au  grand  nombre,  il  faut  la  prendre. 
Dans  lo8  societds  humaines,  tout  se  r^sout  par  des  majorites. 
Le  marchand  en  gdn^ral  repousse  les  droits  qui  diminuent  ses 
profits.  Forc(j  de  s'adresser  ^  I'industrie  interieure  il  gagnera 
peut-ctre  moins,  mais  le  pays  y  gagnera  plus.  Tout  co  qu'un 
peuple  consomme  est  un  element  d'aisance  et  de  prosperity 
natioualcs ;  tout  ce  qu'il  consomme  par  echange  est  encore 
lavorablc ;  tout  ce  qu'il  acheic  avec  de  I'argent  pour  sa  con- 
sommation,  I'appauvrit." 

Les  vleilles  erreurs  de  la  balance  du  commerce  etaient  en- 
core vivaces.  Mais  il  etait  au  moins  singulier  d'invoquer 
rinteiet  gdndral,  quand  les  objets  frapp<;8  de  droits  etaient 
de  ccux  que  tout  Ic  monde  consomme,  quand  on  faisait  en- 
cherir  le  sucre,  la  viande,  et  le  fer  au  profit  de  trois  categories 
de  producteurs.  Le"  comte  de  Laborde  ne  craignit  pas  de  le 
leur  reprocher.  "  La  loi  que  vous  allez  rendre,"  dit-il,  "  est 
essenticlicnicnt  priviiegiaire ;  c'est  une  prime  que  toute  la 
France  va  payer  aux  colons,  aux  maitres  de  forges,  aux  nour- 
lisseurs  de  bestiaux  de  la  Normandie."  En  effet  la  loi  du  27 
juillet,  1822,  portait  principalement  sur  ces  trois  points. 

La  loi  du  28  avril,  1816,  avait  mis  sur  les  sucres  etrangers 
une  taxe  superieure  de  33  pour  100  k  celle  des  sucres  de  nos 
colonies :  grande  favour,  qui  en  pen  d'annees  doubla  le  chiffre 
des  importations  colonialcs  et  permit,  en  1821,  k  nos  planteurs 
de  placer  en  France  50  millions  de  kilogrammes  de  sucre, 
tandis  que  les  etrangers  n'en  vendaient  que  2,600,000  kilo- 
grammes. Cependant,  les  planteurs  se  trouvaient  genes  par 
cette  concurrence ;  ils  obtinrent  que  la  surtaxe  fut  eievee  k  50 
pour  100.  Les  interesses  auraient  voulu  plus  encore.  lis 
tomberent  de  Charybde  en  Scylla ;  car,  si  les  sucres  etrangers 
lie  vinrent  plus,  le  sucre  de  betterave,  sollicite  par  les  hauts 


160 


ECONOMIC  HISTORY. 


prix,  Ics  reinpla9a  et  disputa  bientdt  le  march^  aux  produits 
des  Antilles. 

Les  bceiifs  entraient  en  franchise  sous  rEmpire  ;  ils  avaient 
^t^  soumis  au  droit  mod^r^  de  3  francs  h,  partir  de  181G,  et  ilg 
continuaient  h.  entrer.  Lea  ^leveurs  rdclam^rent  et  le  niiiiistre 
dut  proposer,  dans  son  projct,  de  ddcupler  la  taxe  sur  Its 
boeufs  gras.  C'<;tait  ^norme  surtout  un  pays  oil  "la  vinnde 
est  un  objct  de  luxe  pour  les  classes  inf^rieures,"  conimc  disait 
un  d«?put<^.  La  Chambre  ne  le  jugeait  pas  ainsi ;  elle  demnnda 
beaucoup  plus,  et  finit  par  obtenir  60  francs.  En  memo  temps, 
malgri;  le  ministere,  elle  augmenta  les  taxes  d'entree  sur  les 
laines,  sur  les  suifs,  sur  les  viandes  fraiches  et  salves. 

Les  nmities  de  forges  d^claraient  le  droit  dc  ItiS  fr.  tout  I 
fait  insuftisant,  et  le  directeur  gdn^ral,  soutenant  leurs  pr(;ten- 
tions,  annongait  avec  effroi  que  I'importation  des  fontcs  s'fitait 
^levdo,  en  six  ans,  de  800,000  kilogrammes  h.  7,000,000.  "C^- 
tait,"  ajoutait-il,  "un  avertissement  pour  I'administration."' 
Le  droit  sur  les  fers  h  la  houille  fut  portd  a  275  fr.,  represen- 
tant  120  pour  100  de  la  valeur  des  marchandiscs  anglaises 
qu'on  voulait  ^carter.  On  r^ussit ;  car  la  production  du  gros 
fer  doubla,  et  I'importation  anglaise  devint  presque  nulle. 
Mais  le  fer,  qui  sous  Louis  XVL  valait  350  fr.,  monta  a  650 
fr.  la  tonne.  C'etait  un  triste  progrds.  Encore  les  forges  iic  re- 
cueillirent-cUcs  pas  le  profit  de  ce  lourd  imp8t  pr(;leve  sur  Tin- 
dustrie  nationale.  "  Nous  faisions  quelques  b^ndficcs,"  disait 
en  1828  un  propri^taire  d'usine,  "  quand  nous  vendions  a  450 
fr.,  et  nous  perdons  aujourd'hui  en  vendant  ^  500  fr. ;  la  cause 
en  est  qu'en  1819  la  banne  de  charbon  revenait  ^  18  fr.  05  c., 
tandis  qu'elle  revient  i  37  fr.  60  c."  L'avantage  rcstait  aux 
propri^taires  fonciers. 

Les  plus  clairvoyants  ou  les  moins  engages  dans  les  int^rets 
prohibitionnistes  commen9aient  (i  entrevoir  le  danger  du  sys- 
teme.  Ternaux  le  signalait :  "  L'Espagne,"  disait-il, "  a  rdpondu 
par  une  prohibition  de  nos  produits  manufactures  &.  I'impSt  mis 
sur  les  laines,  et  le  ralentissement  de  la  draperie  a  fait  baisser 
les  laines  fran^aises."  ^   Plusieurs  s'etonnaient  qu'une  matiere 

1  Voir  le  Moniteur  de  1822,  p.  940. 
>  Moniteur  de  1822,  p.  899. 


!*'!!> 


LA  POLITIQUE  DE  LA  RESTAUR ATION. 


161 


proiuitTc,  telle  que  la  fonte,  fiit  pour  ainsi  dire  proscrite,'  et 
Ic  ciimtc  do  Laborde  s'lndlgaait,  au  uom  du  progrOs  iudustricl, 
i\\\'i\  cut  fallu  payer  7,000  fr.  do  droit  pour  introduire  k  Saint- 
Ktionno  line  innchinc  k  vapcur.'  Mais  les  prohibitionnistcs 
moiitraicnt  en  perspective,  au  moindre  relachemcnt  dea  ri- 
irueurs,  Ic  marclid  fran9ai8  cnvahi,  nos  ateliers  fermds,  nos 
ouvriors  sans  travail,  et  obtcuaient  sans  peine  un  vote  favor- 
able, en  (jvocjunnt  lo  fantSme  dc  la  ruino  et  do  la  misiiro  uni- 
verselU'S  pour  r<5torquer  Targumcnt  do  lours  advcrsaircs  en 
favour  dcs  consonimatours.^ 

MC'inc  apri's  la  loi  do  1822,  ils  rdclamaient  encore.  Ladroite 
trouvait  que  le  ministiire  n'avait  pas  assez  fait  i)0ur  I'agricul- 
ture  et  pour  le  eommerco.  EUe  provoqua,  en  1823,  la  creation 
d'un  comitd  d'cnqueto  qui  devait  "  s'attacher  surtout  k  recher- 
cher  si  k-s  objcts  dtrangeis  importds  en  France  y  sunt  d'une 
niicessitd  indispensable  conune  mati(5re  premiere."* 

Viveniont  attaqu<5  k  co  sujet  par  le  comte  de  Vaublanc, 
ancien  niinistre,^  le  baron  do  Saint-Cricq,  qui,  depuis  le  com- 
mencement dc  la  Rcstauration,  occupait  le  posto  de  directeur 
general  des  douancs,  so  ddfendit  par  uue  Icttre  insdrdo  au 
Moniteur,  professant  hautement  la  doctrine  protectionniste,^ 
qiul  avait,  disait-il  ddfendue  avant  M.  de  Vaublanc,  mais 
declarant  que  pour  la  rendro  pratique  il  fallait  se  garder  do 
la  pousseur  i\  rcxtrcme,  et  rappelant  les  favours  dont  lo  gou- 

'  Entre  autrcs,  Duvcrfjier  de  Hauranne  et  Laln^. 

2  Mowteur  du  1822,  jtp.  1)39  et  940. 

'"Laissiz  entrtT  les  tissus  de  coton,  les  drops,  les  faiences,  les  fers,  les 
f  mtes,  les  sucres,  ct  une  foule  d'autres  articles  que  vous  ne  pouvcz  encore  fab- 
f'luer  ou  proiliiire  au  prix  de  nos  voisins,  la  constquence  immediate  sera  la 
ri ne  de  vos  colonies,  de  vos  manufactures,  la  misfcre  de  deux  millions  d'ou- 
vritrs,  rexportation  rapide  de  votre  nume'raire  et  la  diminution  plus  rapide 
encore  de  vos  contributions."  —  Discours  de  Bourienne,  rapporteur,  en  reponse 
a  Labbey  de  rompieres ;  Monileur  de  1822,  p.  902. 

*  ifonitem-  de  1823,  se'ance  du  15  mars,  p.  310.  Le  ministfere  posa  la  question 
'I  Etat,  declarant  qu'il  serait  dangereux  que  la  Chambre  enipietat  sur  les  at- 
tributions tie  la  puissance  executive,  et  la  proposition  f ut  rejetc'e ;  la  droite 
"■'Urmiira.  C'est  a  ce  propos  que  furent  publics  les  premiers  tableaux  du  coin- 
"lerce  extcrienr ;  I'attaque  eut  au  moins  de  ce  cot^  un  bon  r^sultat. 

'  !)n  Commerce  de  la  France  m  1820  et  1821,  brochure. 

' "  11  n'est  pas  de  bon  tarif  pour  la  France  que  celui  qui  reserve  aux  Fran- 
■^'islt  plus  de  travail  possible." 

11 


1G2 


ECONOMIC  HISTORY. 


vcrncmcnt  avait  combl(!  Ics  agricultcurs  ct  Ich  manufacturiers, 
trop  oublicux  dcs  services  passes.      Cctte   Icttro   pent  6tro 
regnrd<5o  comme  lo  manifesto  do  radministration  doimni(Vc  dii- 
rant  ectto  p<^riodo :  ''  Dcpuis  la  Rcstauration,"  disait  Ic  haroii 
do  Saint-Cricq,  "  lea  lois  do  douanos  so  sont  applifjudes  con- 
stanuncnt  ^  concilior,  dans  la  vue  d'uno  protection  commune, 
les  intdrfits  souvcnt  opposds,  toujours  distincts,  do  riigriciil- 
turo,  do  rindustrio  et  du  commorcc.  ...  Jo  dcmandcrai  ^ 
ragriculturo  si  co  n'est   pas  i\  cos  lois  qu'elle  doit  et  les 
taxes  d'importation  qui  la  protdgent  contro  un  nomltrc  in- 
fini  do  produits  Strangers,  tols  quo  les  bids,  les  bestiaux,  les 
laines,  les  garances,  les  chanvres,  los  lins,  les  lioubioiis,  que 
le  systiime  constant  des  tarlfs  antdricurs  dtait  d'attirer  par 
une   cntiere   imniunitd,  et   les   franchises   d'exportation  qui 
Guvrcnt  un  facile  dcot'.lcmcnt  s\  des  produits  que  les  lois  an- 
cionncs  no  s'dtaient  jamais  appliqn.dcs  qu'i\  retenir  ?  Je  de- 
manderai  ^  notro  industrio  manufacturitiro  si  ce  n'est  pas  dans 
cos  mfimes  lois  qu'ello  a  trouvd  ct  lo  mainticn  des  garanties 
(juo  lo  travail  national  avait  prdcddcmment  obtenucs  et  les 
garanties  nouvelles  sans  lesquelles  nos  forges,  nos  fabriques 
do  faux,  do  limes,  do  cdruse,  do  minium,  do  zinc,  et  de  cuivre 
laminds,  et  boaucoup  d'autres  encore,  soraient  loin  du  haut 
degrd  de  prospdritd  auquel  ellcs  sont  parvonucs  ?  Je  deraan- 
dorai  enfin  au  commerce  maritime  si  co  n'est  pas  grflec  i  ces 
lois,  et  je  ne  craindrai  pas  d'ajoutor,  grSco  Jl  leur  libdialc  ap- 
plication, qu'il  a  pu  donner  I'essor  h  ses  armomcnts,  prot^gt/s 
pour  la  premiere  fois  par  des  droits  diffdrenticls,  gruMi 
suivant  lo  pavilion  ot  la  longueur  de  la  course,  entroprendre 
avec  sdcuritd  des  spdculations  lointaines,  que  les  taxes  post^- 
rieures  h  rentreprise  ont  constamment  respectdes,  jouir,  quant 
aux  entrepots,  au  transit,  au  cabotage,  et  m§me  au  rogleraent 
des  droits,  de  toutes  les  franchises^  de  toutes  les  faciliti'. 
de  toutes  les  exceptions  rigoureusement  compatibles  avec  I'ac- 
complissement  des  lois  gdndrales  et  de  la  suretd  des  per- 
ceptions  ? "  ^ 
Les  intdressds  ne  se  paySrent  pas  du  souvenir  de  bienfaits 


1  Moniteur  de  1823,  p.  166. 


LA  POLITIQUE  DE  LA   RESTAURATION. 


168 


qu'ils  avaient  pour  la  plupart  cscomptds.  lU  en  voulurcnt  ct 
iU  on  arruchi^ront  d'autres,  d*abord  par  dos  ordonnancos ; 
puis,  sous  Charles  X.,  par  la  lol  du  17  mai,  1826,  qui  diminua 
los  droits  d'cxportatiou,  ot  aggrava  encore  dans  uno  pro- 
iiurtion  considdrablo  les  droits  d'cntr<So  sur  la  plupart  dcs 
itroduits  agi'icolcs.  Lus  laincs  brutds  dtrangdres,  par  exeinpic, 
(lui  payaicnt  10  fr.  au  tarif  do  la  loi  do  1820,  avaient  (ltd 
iiiiposdoH  par  oidunnance  &  30  fr.  en  1823,  ^  40  en  1824,  et  la 
loi  do  1826,  sanctionna  cette  dernifire  taxo :  c'dtait  en  (juehpio 
soitc  excluro  entiOremcnt  les  importateurs  do  nos  marchds 
ruraiix.  Autre  aggravation  sur  les  boeufs  qui,  maigres  ou 
gras,  paytirent  50  fr. ;  mSme  droit  pour  lea  chevaux.  Sur  les 
couvcrtures  de  laine,  I'acicr  fondu,  les  cordages,  les  plumes 
ii  t'crire  et  d'autres  articles,  les  taxes  furent  doubldes.  Elles 
ftircut  quadrupldes  sur  la  plupart  des  tissus  de  fil.  Des  sur- 
taxes nombreuses  furent  imposdes  sur  les  marchandises  im- 
portees  par  navires  Strangers ;  des  primes  d'exportation 
aceordeoa  aux  manufacturiers.^ 

La  loi  de  1820,  compldta  le  systfime  rcstrictif  de  le  Restai> 
ration.  Quolques-uns  de  ses  ])lus  habilcs  ddfenseurs,  le  comte 
de  Villclc  outre  autres,  le  considdraient "  commc  un  moycn 
temporal  re,  mais  indispensable,  offert  k  la  production  fran- 
(;aise,  de  se  mcttro  autant  que  la  nature  des  choses  le  pcrmct, 
en  (.Miuilibro  avec  la  production  dtrangfirc."  Mais  ces  pro- 
hibitions tomporaires,  loin  de  tendre  ^  disparattre,  devaient 
fatalemcnt  se  multiplier,  s'aggravcr,  se  consolider. 

Le  gouveriiement  dtait  plus  sage  que  les  partis.  Toutefois, 
s'il  avait  sur  ces  questions  plus  de  lumiOres  que  la  Chambrc, 
parce  (lu'il  dtait  moins  aveugl<^  par  des  int<jr6t8  particnliers,  il 
n'avait  ni  dos  convictions  assoz  fortes  ni  une  puissance  assez 
iiid(;pendante  pour  rdsister  victorieuscment :  pcu  des  ministrcs 
auiaient  coiisenti  ^  jouer  Icur  portcfeuillc  sur  une  question  do 
douanea,  surtout  avec  tant  dc  chances  de  perte.  Le  gouvcrnc- 
lueut  se  coutcntait  done  de  moddrer  les  ardours  inconaiddrdca 
des  protcctionnistes,  tout  en  se  proclamant  ouvertement  le 
d^fcQseur  du  systSmo.    De  temps  h,  autre,  il  faisait  entendre 


»  Voir  le  Monileur  de  1826,  pp.  177  et  807. 


frr^ 


164 


ECONOMIC  HISTORY. 


h  la  tribune  quelque  avertissemcnt,  comme  le  baron  Louis  en 
1814.  Le  baron  de  Saint-Cricq  lui-meme,  dans  l'expos6  des  mo- 
tifs de  la  loi  du  28  avril,  1816,  s'^tait  exprimd  avee  beaucoup  de 
mesurc :  "  Nous  aurions  moins  de  progres  k  faire,"  dirait-il,''si 
une  trop  longuc  interruption  dans  nos  relations  coinmerciales 
n'eut  constitud  une  prohibition  a  I'abri  de  laquclle  on  a  jju  m'- 
gliger,  sans  danger,  des  muyens  de  perfcctionnemcnt  qu'uiie 
licureuse  rivalitd  n'aurait  pas  raan>iud  de  developper."  .  .  . 
Pour  admettre  cette  rivalit<;,  "  nous  avons  du,"  ajoutait-il,  "at- 
tendre  que  les  temps  et  les  progres  d'une  opinion  qui  s'eelairc 
tous  les  jours  davantage  aicnt  rdsolu  cette  grande  question.'' 
Malheureusement,  c'dtait  hors  du  palais  Bourbon  que  les 
lumieres  se  faisaient  pen  k  pcu  ;  dans  I'Assembldc,  r(5\(!ne- 
ment  prouva  qu'  d'ordinairc  les  intdrets  s'obstinent  et  ne 
s'eclairent  pas.  Ainsi  le  veut  la  nature  humaine.  Oiivrez  la 
porte  du  privil(ige,  la  foule  s'y  prccipitera,  et  on  s'y  etuuffera 
bien  longtemps  avant  de  comprendre  que  Ton  eut  6t6  plus  a 
Taise  en  plein  air  quo  dans  une  enceinte  r<;servde,  niai.-.  ou  tout 
le  nionde  a  voulu  entrer. 

Cet  en^oinbrement  finissait  pardevenir  genant  pour  les  pro- 
tectionnistes  eux-niemes,  qui  dtaient  obliges  de  rudoyer  les 
trop  nornbrcux  pr(jtendants,  et  d'invoquer  centre  eiix  la  tlie- 
orie  du  salut  public.  "  Ne  sait-on  pas,"  disaient-ils,  "fjiio  les 
Bocictds  no  subsistent  et  ne  prosperent  que  par  les  sacrilioes 
individucls  ?"^  lis  vantaient,  et  avee  raison,  la  prDsperite 
indu.striclle  de  la  France  sous  le  governement  des  15otirbiins;'^ 
mais  c'etnit  h  tort  qu'ils  en  rapportaient  rhonnour  aux  taxes 
prohibitives.  lis  ne  comprenaient  pas  que,  sous  dc  bonnes 
comme  sous  de  mauvaises  lois,  une  soci(3t<i  pent  se  dcvolopper, 
quand  elle  a  en  clle  de  pu'ssantes  causes  de  vitalite,  ot  (|u"en 
pareil  cas,les  details  de  I'administration  qu'il  no  faut  iiotiitniit 
jamais  dddaignor,  fncilitcnt  ou  retardent  le  progres,  nmis  smis 
I'dtouffer.  Or  la  France  du  dix-ncuvieme  siecle  dtait  aniniee 
par  deux  principes  superiours  qui  la  faisaient  alors  giiuidir, 
malgri5  les  obtaclos  :  la  science  et  la  liberty. 

1  Rapport  de  M.  FoiiqiiiiT-IiOnpr,  Mimlfur  de  1810,  p.  408. 

"^  Sous  808  rois  legitimes,  co  beau  royautne  jouit  de  tons  les  bienfaits  di' Is 
paix;  chaque  jour  ses  rielie?ses  a'accroissent,  la  grande  masse  <Ie  In  pdpulnlion 
les  partage,  le  uercle  des  jouissanccs  individuelles  s'etend.  —  Ibidem. 


LA  POLITIQUE  DE  LA  RESTAURATION. 


165 


A  rextdrieur,  le  systeme  prohibitif  devait  n^cessairemcnt 
amencr,  comme  5.  I'^ipoque  de  la  lutte  de  Colbert  conti'e  les 
Ilollandais,  des  m(;contentements,  et  par  suite  des  represailles 
ct  des  capitulations.  La  Restauration  c^da  d'abord  devant  lea 
menaces  des  Eltats-Uuis,  et  sigiia  la  convention  de  1822,  qui 
^tablissait  entre  les  deux  marines  le  principe  de  la  rdcipro- 
cito;'  P"i^  clle  cdda  devant  rAngleterre,^  et  bientot  elle 
tiaita  sur  pied  d'^galit^  avec  les  fitats-Unis.^ 

Le  spectacle  de  la  richessc  croissante,  non-seulement  en 
France,  mais  dans  la  plupart  des  Etats  de  I'Europe,  ou  la 
paix  favorisait  I'essor  des  entreprises,  avait  pourtant  stimuli 
les  <;tudcs  d'dconoraie  politique.  L'Angletcrre  commcn^ait  h 
fixer  sou  attention  sur  le  sort  de  classes  laborieuses,  et  Hus- 
kisson  vcnait  de  la  faire  r^solument  entrer  dans  les  voies  do  la 
libeit(i  commerciale.  L'AUemagne  dcoutait  la  voix  de  List 
proclamant  les  bienfaits  d'une  union  douani^re,  et  organisait 
le  Zollvei'ciu. 

La  France,  qui  avait  eu,  au  dix-huitieme  siecle,  le  mdrite 
(le  poser  avec  Quesnay  les  premiers  fondements  de  la  science 
iconomique,  la  retrouvait  transformde  par  Adam  Smith,  et  en 
rasseinblait,  avec  J.  B.  Say,  les  dliimcnts  en  un  corps  de  doc- 
trine m(;tliodique.  Le  TraitS  tVEconomie  Politique,  public 
pour  la  premiere  fois  sous  le  Consulat,  remani()  et  amdlior^ 
dans  cliacunc  des  Editions  successives,*  r^paiidait  de  justes  idi^es 
sur  les  lois  de  la  production  et  de  la  distribution  des  richesses, 

'"Art.  1.  Les  produits  naturels  ou  manufactures  des  fttats-Unis  importe's 
tn  France  sur  batirnents  des  Eiats-Uiiis,  payeront  un  droit  additionel  qui  n'ex- 
ccdera  pas  20  fr.  par  tonneau  de  marchandises,  en  sus  des  droits  payns  sur  les 
m'-^fs  proiiiiits  naturels  ou  manufactures  des  fitats-Unis,  quand  ils  sont  im- 
ports par  naviri's  friinvais.  —  Art.  2,  Les  produits  n'J.turels  ou  manufactures 
lit  France,  iinpiirtos  aux  Etats-Unis  sur  bitiments  franc , lis,  payeront  un  droit 
addititinnt'l  qui  n'excedera  pas  3  dollars  75  cents  par  tonneau  de  marcliandise, 
en  sus  (]fs  dwits  payc's  sur  les  memes  produits  naturels  ou  manufactun's  de 
France,  quand  ils  sont  iniporte's  par  navircs  des  fitats-Unis."  —  Convention  do 
navigation  et  de  commerce  conclue  entre  la  France  et  les  Etats-Unis  le  24  juln 
b22. 

'  Traite  de  navig.  avec  I'Angleterre,  du  8  fevrier,  1826. 

'  Traite  do  comni.  et  de  navig.  du  7  juin,  1826. 

'  La  premiere  e'dition  est  de  1803.  Quatre  autrcs  editions  ont  eti'  public'es, 
^un grand  nombre  d'exemplaires,  pendant  la  Bestauration,  en  1814,  1817,  1819, 
«1828, 


166 


ECONOMIC  HISTORY. 


et  I'auteur  les  avait  lui-meme,  depuis  1819,  propagdes  au  Con- 
seryatoire  des  arts  et  m<iticr3  dans  rcnseignement  dont  I'avait 
ohfi,rg<j  le  comte  Decazes.^ 

Non-seulement  il  montrait,  comme  Adam  Smith,  la  source 
des  richesses  dans  le  travail ;  mais  le  premier  par  une  thdoric 
neuve  ^  autant  que  simple,  il  faisait  apercevoir  les  liens  de 
solidarity  qui  unissent  les  diffdrentes  industries  et  dans  une 
meme  nation  et  entre  des  nations  diverses.  "De  toute 
maniSre,"  disait-il  avee  la  rectitude  du  bons  sens,  "I'acliat 
d'un  produit  ne  peut  etre  fait  qu'avec  la  valeur  d'un  autre. - 
La  premiere  consequence  qu'on  peut  tirer  de  cette  importante 
v6rite,  c'est  que,  dans  tout  Etat,  plus  les  productcurs  sont 
nombreux  et  les  produits  multipli(is,  et  plus  les  deboucli(;s  sout 
faciles,  varies,  et  vastes.  —  Une  seconde  consequence  du  meme 
principe,  c'est  que  chacun  est  intercssd  h.  la  prosperity  dctous, 
et  que  la  prospdritd  d'un  genre  d'industrie  est  favorable  a  la 
prospdrite  do  tous  les  autres.  —  Une  troisieme  consequence 
de  ce  principe  fecond,  c'est  que  I'importation  des  produits 
etrangcrs  est  favorable  a  la  vcnte  des  produits  indigenes; 
car  nous  no  poiivons  achetcr  les  marcliandises  etrangeres 
qu'avec  des  produits  do  notre  industrie,  de  nos  torres  et 
de  nos  capitaux,  auxquels  ce  commerce,  par  consequent, 
procure  un  deboucbe."  ^ 

Cos  principcs  etaient  bien  differents  de  ceux  qu'on  pro- 
fessait  st  la  Chambre  des  Deputes.  lis  constituaient  iin 
remarquable  progres  dans  la  maniere  non-seulemont  de  com- 
l>i'endre  les  questions  commerciales,  mais  d'envisager  h 
politique  tout  entiere.  L'opposition  apparente  dos  interits 
avait  rendu  nationalc  la  hainc  do  I'etranger  et  placid  ^^^ 
peuples  vis-a-vis  les  uns  dos  autres  dans  un  etat  permanent 
d'bostilite  secrete  on  avouee ;  les  sages  eux-mrincs  le  pri> 
clamaicnt.  "  Telle  est  la  condition  humaine,"  ecrivait  Vol- 
taire, "  que  souhaiter  la  grandeur  do  son  pays,  c'est  soiihaiter 
du  mal  ^  ses  voisins.  ...    11  est  clair  qu'un  pays  nc  pent 

1  Publie  sous  le  titre  di'  C'omi-s  complet  d'l^cnnomie  politique  pralique. 

2  Autant  que  peuvent  etre  neuves  les  observations  du  bons  sens.  Uiiaoi' 
de  Venise  parlait  au  quinzienie  sieele  eonime  J.  B.  Say  au  dix-neuviemc.  »»" 
la  le^on  d'ouverture  de  M.  Baudrillart  au  College  de  France,  anne'e  1801). 

3  Train  d'Econitmie  politique,  edition  de  1841,  pp.  141,  144, 145, 


LA  POLITIQUE  DE  LA   RESTAURATION, 


167 


ffaffner  sans  qu'un  autre  perde."  *  De  cette  opinion  d^rivait 
naturellomcnt  la  balance  du  commerce  et  I'esprit  du  systdme 
prohibitif.  La  th<iorie  des  d^bouch^s  de  J.  B.  Say  ouvrait  un 
horizon  bicu  autrement  large  au  commerce  et  h,  la  philosopliie 
politique.  Mais,  quoique  produite  k  la  tribune,  avec  beaucoup 
de  reserve,  par  quelqucs  orateurs  de  la  gauche,  elle  ne  pouvait 
avoir  I'agremeut  de  la  majority :  les  int^rets  comprcnnent  dif- 
ficilemont  les  th<;orics  qui  les  genent. 

Ccpeudant  le  minist^re  Villele,  devant  I'hostilitd  manifesto 
de  la  bourgeoisie  parisienne,  avait  fait  appel  a  I'opiniou  de  la 
France;  les  Elections  lui  avaient  C^id  contraires,  et  il  s'^tait 
retird  pour  faire  place  au  cabinet  le  plus  liberal  qui  ait  dirigd 
les  affaires  sous  la  Restauration.  Martignac  crda  un  ministere 
du  commerce  et  y  appela  le  baron  de  Saint-Cricq.  C'dtait 
le  moment  de  tenter  unc  r<?formc  ;  la  gauche  appuyait  le 
cabinet,  ct,  dans  son  adresse,  la  Chambrc  proclama  "que 
le  premier  bcsoin  de  I'industrie  et  du  commerce  (itait  la 
liberte."  Une  commission  d'enquetc  fut  nommdc  par  le 
gouvcncment  en  1828.2  La  conclusion,  qui  (itait  loin  de 
dohiicr  ])leine  satisfaction  au  vceu  de  radressc,  fut  que 
"dans  I'etat  de  I'industrie  en  France  en  presence  des  intdrets 
liui  s'y  trouvent  engag<is,  on  doit  s'en  tenir  <\  un  systeme  rai- 
sonn(;  de  protection,  c'est-iVdire,  d'une  part,  protdger  cfficace- 
mcnt  le  travail  du  pays,  et  de  I'autre,  ^tudicr  soigncusement, 
pour  oliaque  Industrie,  la  quotit^  de  la  protection  n(jces8aire 
en  pr<5  11  -o  des  dommagcs  que  pouvait  crdcr  unc  protection 
excessive."^  Le  baron  de  Saint-Cricq  pouvait,  commo  tout 
radministration,  I'accepter  sans  rcnoncer  a  ses  proprcs  idoes  ; 
il  deolara  a  la  tribune  avoir  toujours  pens{i  ct  prot'css<3  qu'il 
II''  fallait  "iii  tout  permettre  ni  tout  interdiro,"  ct  quo,  pourvu 
'lu  on  admit  le  principe  de  la  protection,  il  adincttait  tres-bion, 
de  son  cote,  la  controverse  sur  la  limite  &,  fixer.  Or,  le  projct 
'|uil  pr^senta,  sans  changer  I'esprit  des  tarifs,  adoucissait  les 

'  Voltaire,  Did.  philox.,  \a  partie. 
II  y  itit  des  coiiiinissaircs  dans  la  plupart  des  grandcs  villes  et  pour  les 
grandos  imlustries.     Voir,  pnssivi,  le  Momteur  de  1828. 

'  i[oniiPur  de  1820,  p.  810.  Expost  des  motifs  par  le  baron  de  Saint-Cricq. 
CoiKiiiliint  deux  enquetes  seulement  furent  faites  metiioiliquement  ct  publie'es. 
i'£(.vut/c  sur  Its  Jus,  1828,  1  vol.  in-4,  et  I'Enquek  sur  les  sums,  1828, 1  vol.  in-4. 


168 


ECONOMIC  HISTORY. 


taxes  de  certains  produits  exotiques,  et  annon9ait  que,  cinq  an? 
apres  la  publication  de  la  loi,  le  droit  sur  les  fers  sciait  di- 
minud  d'un  cinquieme.  C'^tait  un  commencement  de  r(3forme 
qui,  par  son  extreme  moderation,  avait  I'avantage  de  ne  pas 
froisser  trop  rudement  les  inti^rets,  et  la  chance  d'etre  adopt(J, 
II  ne  fut  pas  meme  discut^.  Le  ministere  Martignac  toniba. 
et  son  successeur  se  garda  bien  de  reprendre  un  projet  di's- 
agr^able  h  la  droite. 

Le  systemc  proliibitif  qui  caract^rise  la  l(?gislation  douanierc 
de  la  Rcstauratioudcmeura  intact.  Constitu<3  par  les  loisde  18111 
et  de  1821  pour  los  c^r^ales,  par  les  lois  de  1816,  de  1817,  de 
1818,  de  1820,  de  1822,  et  de  1826  pour  les  produits  de  ragii- 
culture  et  des  grandes  fabriques,  il  s'^tait  propose  comme  but 
de  rdserver  aux  seals  producteurs  frangais  le  march<3  fran^ais. 
But  bien  difficile  ^  atteindre  dans  un  dtat  de  civilisation  uu 
les  rapports  des  peuples  sont  si  frequents ;  impossible  et  il- 
logique,  des  qu'on  avait  en  meme  temps  la  pretention  de  favor- 
iger  et  dY'tendrc  le  commerce  extdrieur.  Pour  rdussir,  sans 
commettre  de  trop  grandes  injustices,  il  aurait  fallu  pouvoir 
isoler  la  France  comme  le  Japon  s'est  longtemps  isol^  au 
milieu  de  I'Ocean  ;  le  travail  qu'on  se  plaisait  h,  apjicler  na- 
tional aurait  seul  pourvu,  tant  bien  que  mal,  aux  bosoinsdes 
nationaux,  et  tons  auraient  subi  la  condition  commune.  Mais 
dds  que  la  barriere  ne  s'dlevait  que  pour  quelqucs-uns,  il  v 
avait  necessairemcnt  un  privilege  en  faveur  de  ceux,  quels 
qu'ils  fussent,  qui  avaicnt  le  droit,  comme  producteurs,  d'im- 
poser  leurs  marchandises  h,  leurs  concitoyens  et  le  droit, 
comme  consommateurs,  de  choisir  entre  les  marchandises  de 
leurs  concitoyens  et  celles  des  dtrangers.  II  devait  y  avoir, 
par  suite,  unc  ardente  competition  pour  6tre  udmis  a  la 
jouissance  de  ce  privilege. 

Pour  assurer  h,  I'interieur  Texecution  des  lois  prohibitivcs. 
il  fallut  etendre  encore  ^  de  nouveaux  objcts  la  suivciilance 
administrative,  —  ordonner,  par  excmple,  que  los  tissiis 
tricots  de  la  nature  de  ceux  qui  etaient  prohibos  \w  fussent 
mis  en  vente  qu'avec  une  marque  particuliere,'  prescrire  le 


1  Ord.  des  8-14  aoftt.  1810. 


LA  POLITIQUE  DE  LA   RESTAUR ATION. 


169 


mode  (Ic  d<3vldage  et  d'euveloppe  de  cotons  filds  en  Fnuice,* 
fairc  do  visitcs  domiciliaires,  saisir  les  marchandiseii  suspcctes, 
exciter  dcs  mdconteiitements  et  des  reclamations.^  Un  mal 
coiuluisait  a  iin  autre  mal. 

II  faut  dire,  pour  mieux  faire  comprendre  les  causes  de  la 
l)ijliti(|iio  commeiciale  en  France,  que  dans  toute  I'Europe  le 
vent  <;tait  alors  <\  la  protection.  Apres  les  rudcs  secousscs  de 
TEmpirc,  les  iiationalitds  s'(3tant  reconstitutes,  les  gouverne- 
inents  avaieiit  favorisd  dans  une  certaine  limite  cette  tendance 
qui  semljlait  assurer  leur  ind^pendance  politique,  et  chacun 
s'etait  gardo  d'autant  plus  de  scs  voisins  que  les  (ivdnemcnts 
Favait,  qucl(jue  temps  auparavant,  li^  plus  dtroitement  a  eux. 
Partout  on  avait  repoussd  les  produits  (jtrangers,  et  parti- 
ciilieremoiit  les  produits  anglais,  dciil  I'introduction  ^  bas 
prix  avait  fort  ddconcerte  les  manufacturiers  du  continent. 
La  France,  il  est  vrai,  avait  donnij  I'exemple  aux  Pays-Bas, 
!i  rAlleniague,  a  I'Espagne ;  mais  ceux-ci  s'dtaient  empresses 
de  le  suivre,  et  parfois  I'avaient  d<jpass^.  L'Angleterre  elle- 
uume  etait  rcstde,  jusqu'en  1824,  herissde  de  prohibitions, 
qircllo  avait  meme  aggravdes  au  profit  de  ses  propri(itaire8 
fonciers. 

La  protection  dtait  au  pouvoir  en  Europe.  Toutefois  r<;co- 
noniie  politiiiue,  patronne  de  la  liberty  commerciale,lui  livrait 
dm  de  rudcs  combats  dans  le  domaine  de  la  science ;  elio  tri- 
ompliait  dans  le  domaine  des  faits ;  elle  donnait  Huskisson 
i  TAnglctorre  et  en  France  elle  commengait  h  miner,  avec  le 
double  argument  de  la  consommation  et  des  debouch(js,  la 
fortoresse  elevde  par  des  intdrets  privds  et  soutenne  par  des 
projuges:  mais  la  forteresse  dtait  dnergiquemcnt  defendue. 

1  Loi  du  21  avril,  1818;  loi  du  26  mai,  1819;  ord.  du  16  juin,  1819;  des  1-15 
li'  1810;  des  »-24  avril,  1829. 

■  I'rdiant  en  considi'ration  les  representations  adrossc^es  de  la  part  d'un 
i.fanij  nombre  de  tmniifactnriers  Pt  de  niarcliands  de  bonneterie,  soit  sur  I'insuf- 
isance,  en  co  qui  leg  conwrno,  des  dolois  prece'demment  accordes,  soit  sur  les 
>i'incuii(^  ([111 » npposcnt  ii  i>'  mio  la  m  irqiie  puisse  etre  separcment  appliquee  h 
cliatun  des  objets  proveuaut  de  leur  ;  idustrie.  —  Ord.  des  23-30  sept.  1818. 


170 


ECONOMIC  HISTORY. 


VIII. 


THE  ZOLLVEREIN. 


From  Bowbino's  Report  on  the  Prussiax  Commercial  Usiox. 
Parl.  Doc.  1840,  Vol.  XXI.  pp.  1-17. 

IN  compliance  with  the  instructions  which  I  had  the  honor 
to  receive  from  your  lordship,  dated  Foreign  Office,  July 
14, 1839, 1  proceed  to  report  on  the  progress,  present  state, 
and  future  prospects  of  the  Prussian  Commercial  League. 

No  doubt  this  great  Union,  which  is  known  in  Gcrnianv  k 
the  name  of  the  Zollverein,  or  Zollverhande  (Toll  Associa- 
tion or  Alliance),  derived  its  first  and  strongest  influence  from 
a  desire  to  get  rid  of  those  barriers  to  interconnnuiiication 
which  the  separate  fiscal  legislation  of  the  various  States  of 
Germany  raisf  imong  a  people  whom  natural  and  national 
feelings,  a^  well  is  common  interests,  would  otherwise  iiave 
connected  more   iitimately  and  permanently  togvllicr. 

The  Zollverein  represents,  in  Germany,  the  ojwration  of 
the  same  opinions  and  tendencies  which  have  already  effected 
so  many  changes  in  the  commercial  legislation  of  other  coun- 
tries.    In  the  United  Kingdom  the  custom-house  hiws  wliicli 
separated   Scotland   and   Ireland    from   England  have  been 
superseded  by  a  general  system  applicable  to  the  whole.  In 
France  the  local  barriers  and  the  local  tarifi's  have  given  way 
to  a  general  and  uniform  system  of  taxation.     Even  before 
the  Commercial  League  associated  so  many  Slates  in  a  com- 
mon union,  several  less  extensive  eombinations  had  prepared 
the  way  for  a  more  diffusiv*^  intercourse.     Between  the  States! 
which  do  not  form  part  of  the  Prussian  League —  as,  for 
example,  between  Hanover  and  Brunswick  and  Oldcnbnvirli.-j 
the  same  tariffs  have  been  adopted,  and  the  payment  of  duties 


THE  ZOLLVEREIN. 


171 


in  one  of  the  States  is  sufficient  to  secure  free  sale  or  transit 
in  the  other. 

The  Commercial  League  is,  in  fact,  the  substantial  reprc- 
gontativft  of  a  sentiment  widely,  if  not  universally,  spread  in 
Germany,  —  that  of  national  unity.     It  has  done  wonders  in 
breaking  down  petty  and  local  prejudices,  and  has  become 
a  foundation  on  which  future  legislation,  representing  the 
common  interests  of  the  German  people,  may  undoubtedly  be 
jiereat'tcr  raised.     If  well  directed  in  its  future  operation,  the 
ZoUverein  Avill  represent  the  fusion  of  German  interests  in 
one  great  alliance.     The  peril  to  its  beneficial  results  will 
ffiow  out  of  the  efforts  which  will  be  made,  and  which  are 
already  made,  to  give  by  protections  and  prohibitions  an  undue 
weight  to  tlie  smaller  and  sinister  interests  of  the  Vercin.   But 
if  its  tariffs  be  so  moderate  and  so  judicious  as  to  allow  full 
pky  to  the  interests  of  the  consumers  in  the  field  of  competi- 
tion ;  if  thee  should  be  no  forcing  of  capital  into  regions  of 
unpriwluetive  loss  or  of  less  productiveness ;  if  the  claims  of 
manufacturers  to  sacrifices  in  their  favor  from  the  community 
at  large  be  rejected ;  if  the  great  agricultural  interests  of  Ger- 
many recover  that  portion  of  attention  from  the  commercial 
union  to  which  they  are  justly  entitled ;  if  the  importance  of 
foreign  trade  and  navigation  be  duly  estimated,  —  the  ZoU- 
verein will  have  the  happiest  influence  on  the  general  prosper- 
ity, And  that  the  League  has  been  much  strengthened  by  the 
experience  of  its  b  nefits ;  that  its  popularity  is  extending ; 
that  its  further  spreading  may  be  confidently  anticipated, 
-appears  to  be  indubitable.      In  fact,  the  ZoUverein   has 
brought  the  sentiment   of   German   nationality   out  of   the 
1'0','iuns  of  hope  and  fancy  into  those  of  positive  and  material 
interests;  and  representing,  as  it  does,  the  popular  feeling  of 
'iirmauy,  it  may   become,  under  enlightened   guidance,  an 
iiistriuuent  not  only  for  promoting  the  peace  and  prosperity 
of  tlic  States  that  compose  it,  but  of  extending  their  friendly 
relations  through  the  world. 

Considerations  both  of  morality  and  economy  were  not 
wanting  to  recommend  the  Commercial  Union  to  the  German 
people.    Not  only  were  the  numerous  barriers  and  various 


172 


ECONOMIC  HISTORY. 


legislation  of  the  German  ^'-ites  great  impediments  to  trade, 
but  they  created  a  considerable  amount  of  contraband  traffic 
and  caused  the  country  to  swarm  with  petty  smugglers,  who 
lived  upon  the  profits  which  the  varieties  of  the  tariffs  placed 
within  their  reach.  The  custom-house  administration  was 
costly,  and  generally  inefficient,  from  the  extent  of  frdiitier 
to  be  guarded ;  so  that  the  establishment  of  one  large,  instead 
of  a  variety  of  small  circles,  has  led  at  the  same  time  to  a 
great  diminution  of  cost  and  a  great  increase  of  cflicioncv, 
while  it  has  removed  from  all  the  interior  of  Germany  that 
demoralizing  influence  which  the  presence  of  multitudes  of 
illicit  traders  and  smugglers  always  brings  with  it. 

The  Zollverein  was  not,  as  it  has  been  often  asserted  to  be, 
a  union  formed  in  hostility  to  the  commercial  interests  of 
other  States  ;   it  was  not  intended  prematurely  to  create  a 
manufacturing  population  in  rivalry  with  or  opposition  to  the 
manufacturing  aptitudes   of   Great   Britain ;    it  was  by  no 
means  the  purpose  of  its  founders  to  misdirect  ca])ital  to 
unprofitable   employment,  to  sacrifice  agriculture  to  trade, 
or  to  encourage  less  the  field  than  the  factory.    The  Zoll- 
verein was  the  substantial  expression  and  effect  of  a  geueral 
desire  among  a  great  nation,  split  into  many  small  States. 
but  still  of  common  origin,  similar  manners,  speaking  the 
same  language,  educated  in  the  same  spirit,  to  communicate, 
to  trade,  to  travel,  without  the  annoyance  and  iuipediuients 
which  the  separate  fiscal  regulations  of  every  one  of  their 
governments  threw  in  the  way.     If,  in  the  natural  process  of 
things,  the  tariffs  of  the  Zollverein  have  become  liostile  to 
the  importation  of  foreign,  and  especially  of  Britisli  produce, 
it  is  because  our  laws  have  prevented  the  greater  extension  of 
commercial  relations  with  Germany.     We  have  rejected  the 
payments  they  have  offered  ;  we  have  forced  their  to  manu- 
facture what  they  were  unable  to  buy ;  and  we  have  put  in 
their  hands  the  means  of  manufacturing  cheaply,  by  refusing 
to  take  the  surplus  of  their  agricultural  produce,  the  non-ex- 
portation of  which  has  kept  their  markets  so  low  that  small 
wages  have  been  sufficient  to  give  great  comforts  to  their 
laborers. 


THE  ZOLIVEREIN. 


173 


TInMC  can  be  no  doubt  that  the  hostile  tariffs  of  other 
nations,  iiiul  especially  the  corn  and  timber  laws  of  Great 
Britain,  served  greatly  to  strengthen  the  arguments  in  favor 
of  conimereial  union.  It  was  felt  necessary  to  extend  the 
home  market  while  foreign  niariiots  were  closed,  or  only 
partially  and  irregularly  opened,  to  the  leading  articles  of 
(iernian  production. 

"Wo  should  not  have  complained,"  says  a  distinguished 
riornian  writer,  in  1835,  "  that  all  our  markets  were  overflow- 
ini:  witli  English  manufactures,  —  that  Germany  received  in 
British  cotton  goods  alone  more  than  the  .  imdred  millions 
of  British  snhjects  in  the  East  Indies,  —  had  not  England, 
while  she  was  inundating  us  with  her  productions,  insisted  on 
closinir  lier  markets  to  oiin.  Mr.  Robinson's  Resolutions  in 
I8I0  had,  in  fact,  excluded  our  corn  from  the  ports  of  Great 
Britain;  she  told  us  we  were  to  buy,  but  not  to  sell.  We 
WLie  not  willing  to  adopt  reprisals ;  we  vainly  hoped  that 
a  sense  of  her  own  interest  would  lead  to  reciprocity.  But 
wi'  were  disappointed,  and  we  were  compelled  to  take  care  of 
iiursclves."  ^ 

Thus,  while  on  the  one  hand,  the  Zollverein  was  advo- 
cated as  a  measure  of  self-defence  against  the  hostile  legis- 
lation of  foreign  nations,  it  should  not  be  forgotten  that,  as 
rt  spocts  the  confederated  States,  it  represented  the  principles 
111  unrestricted  intercommunication. 

As  between  more  than  twenty-six  millions  of  Germans,  it 
was  the  cstaltlishment  of  free  trade  ;  restrictions,  duties,  pro- 
liiliitions,  custom-liouses,  there  are  none,  as  far  as  regards  the 
various  States  that  comprise  the  Commercial  Union.  What- 
ever impediments  the  tariffs  create  to  commercial  communi- 
cation with  foreign  lands,  the  League  has  thrown  down  every 
kurior  whieh  stood  in  the  way  of  trading  intercourse  between 
the  different  branches  of  the  great  German  family,  which  the 
League  represents.  And,  as  the  conception  of  the  League  was 
popular  and  national,  so  it  cannot  be  denied  that  its  workings 
have  been,  0%  the  whole,  favorable  to  the  prosperity  and  to  the 


^  Kanke's  "  Historisch-politische  Zeitscbrift." 


)■ 

j 

■"^ 

( 

174 


ECONOMIC  IIISTOny. 


happiness  of  the  German  community.  Tariffs  less  hostile  to 
the  manufactures  and  foreign  commerce  of  nations  would,  m 
I  conceive,  have  greatly  added  to  the  beneficial  effects  of  the 
Union.  Its  more  extended  communications  with  other  conn. 
tries  would  have  given  greater  energy,  and  opened  a  widir 
field  to  the  increased  activity  of  the  home  trade.  TIk re  is ni 
reason  why  foreign  commerce  should  not  have  been  bciiofitul 
to  the  same  or  even  a  wider  extent  than  internal  indiistiy. 
by  the  overthrow  of  that  local  legislation  which  inijiodcd  in- 
tercourse, and  by  the  introduction  of  a  uniform  and  liberal 
system  of  custom-house  legislation. 

The  Zollverein  now  represents  the  interests  (well  or  ill 
understood)  of  more  than  twenty-six  millions  of  inliabitants 
of  the  most  civilized  and  opulent  parts  of  Europe,  and  \m 
accomplished  one  important  result,  namely,  of  excitinj:  the 
attention  and  of  awakening  the  apprehensions  of  more  tlian 
one  neighboring  nation.  What  the  Zollverein  is  to  become 
may  depend  as  much  upon  others  as  upon  themselves;  and. 
should  its  course  be  guided  by  enlightened  econoniv  and 
sound  commercial  policy,  it  may  become  an  instrument  of 
incalculable  and  boundless  good. 

Long  before  the  Zollverein  came  into  operation,  the  same 
spirit  which  led  to  its  formation  had  been  exhibited  in  various 
parts  of  Germany,  leading  to  sundry  local  and  even  national 
reforms  in  the  commercial  policy  of  the  German  States. 

Some  steps  had  been  taken  in  Prussia,  during  the  years 
1816  and  1817,  by  sundry  ordinances  to  introduce  a  general 
and  simple  system  of  custom-house  legislation,^  and  on  the 
26th  May,  1818,  a  new  tariff  was  published,  which  is,  infaet, 
the  groundwork  of  the  existing  arrangements.  Before  this 
period  a  different  fiscal  system  prevailed  in  different  parts 
of  the  Prussian  kingdom.  The  imposts  in  Brandenbur? 
amounted  to  69  groschen  —  7«.  4..-?.  per  individual ;  in  Silesia 
they  vere  only  22  groschen —  2s.  Sd.  The  new  law  allowed 
the  unrestricted  circulation  of  all  foreign  products  which  had 

1  See  especially  the  ordinance  of  11th  June,  1816  — "Zur  Aufhcbungder 
Wasser-Binncn  und  Provinzialzolle  zunachst  in  den  alien  Frovinzen  der 
Monarchie." 


THE  ZOLLVEREIN. 


176 


once  passed  the  frontier,  and  the  free  transit  of  all  home  pro- 
ductions. The  intention  of  this  tariff  of  1818  was  to  establish 
10  per  cent  as  the  maximum  of  protection ;  and,  had  the 
intention  of  the  Prussians  been  carried  into  effect,  there 
would  have  been  no  grounds  for  complaint. 

In  speaking  of  the  Prussian  tariff  to  the  House  of  Com- 
mons, on  the  7th  May,  1827,  Mr.  Huskisson  stat'^d  "that  the 
duties  on  the  internal  consumption  of  British  goods  arc  what 
we  should  consider  very  low  upon  most  articles,  fluctuating 
from  5  to  10  j)cr  cent  —  upon  no  one  article,  I  believe,  ex- 
cecdiuf,'  15  per  cent ;  "  but  this  was  undoubtedly  an  incorrect 
view  of  things,  for  it  will  appear,  on  the  investigation  of  the 
matter,  that  the  duties  on  many  articles  of  British  manufac- 
ture vary  from  20  to  100  per  cent  upon  the  value ;  and 
tliough  no  doubt  the  duty  (being  levied  on  the  weight)  has 
much  increased  in  ad  valorem  amounts  since  1827,  it  was, 
iven  then,  from  20  to  60  per  cent  on  various  low-priced  manu- 
factures; nor  was  Mr.  Huskisson  warranted  in  saying  that, 
••in  the  whole  Prussian  tariff,  there  is  not  a  single  prohibi- 
tion," inasmuch  as  imports  of  salt  and  playing-cards  are 
wholly  prohibited,  except  for  government  accotuit. 

The  most  important  step  by  which  evidence  was  given  of 
the  tendency  of  the  different  States  of  Germany  to  amalga- 
mate their  interests  and  to  establish,  instead  of  many  tariffs, 
one  single  system,  was  the  union  of  Bavaria,  Wiirtcmberg, 
Hohenzollern-Sigmaringen,  and  Hohenzollern-Hechingen,  in 
the  commercial  league  of  28th  July,  1824.  Baden,  the  two 
Ilesses,  and  Saxony  were  afterwards  invited  to  join  the 
League.  The  government  of  Prussia,  alive  to  the  state  of 
public  opinion,  had  entered  by  various  treaties,  from  1819  to 
ls30,  into  a  commercial  league  with  Grand  Ducal  Hesse, 
Lippe  Detniold,  and  some  smaller  states,  and  in  December, 
1826,  the  enclaves  (such  portions  of  the  territory  as  are  sur- 
luunded  by  another  State)  of  Mecklenburg-Schwerln,  Ripen- 
Hesseland,  Schoenberg,  Anhalt-Kothen,  Anhalt-Dcssau,  Hesse- 
Ilomburg.  and  other  States,  joined  the  Prusso-Hessian  Union ; 
^liile,  in  1831,  Saxony,  Electoral  Hesse,  Saxe  Weimar,  Saxe 
Meiningen,  Saxe  Coburg,  Saxe  Altenburg,  and  other  united 


^ 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


1.0 


I.I 


2.0 


llllli  hX  U4 


ScMices 
CarporatiQn 


37 


:\ 


23  WIST  MAIN  STIHT 

WltSTM,N.Y.  I4SM 

(7U)t73-4S03 


6^ 


) 


.**i^ 


K<^ 


^A 


^ 


<i 


o 


',  <^^ 

»* 


WW    ^ 

i'i' 

l^r'.v 

i 

( 

176 


ECONOMIC  HISTORY. 


themselves  to  the  Bavaro-Wurtemberg  league.  Each  of  these 
two  great  branches  naturally  sought  to  extend  its  influence, 
and  each  prepared  the  way  for  a  fusion  of  the  whole  in  one 
great  association. 

On  the  22d  March,  1833,  a  treaty  was  concluded  between 
Prussia,  Bavaria,  Wiirtemberg,  Electoral  and  Ducal  Hesse; 
on  the  80th  March  of  the  same  year.  Saxony  joined  the  asso- 
ciation ;  on  the  11th  of  May,  Anhalt  and  Ducal  Saxony  united 
themselves.  The  ratifications  were  exchanged  on  the  11th  of 
May.  This  treaty  is  the  basis  of  the  ZoUverein,  or  Com- 
mercial League.  It  will  be  found  at  length  in  the  Appendix 
I.  (Pari.  Doc.  pp.  73-78).  In  1885  Baden  united  itself  to  the 
League,  and  Nassau  and  Frankfort-on-the-Maine  have  also 
become  parties. 

The  first  Prusso-Hcssian  Union,  taking  the  name  of  tbe 
Preussiach-Hessischen  Zoll  Verbande,  comprising  many  smaller 
States,  such  as  Anhalt  Dessau,  Anhalt  Neubcrg,  Saxc  Coburg 
Gotha,  Anhalt  Kothen,  Schwarzburg  Sondcrshausen,  Hesse 
Homburg,  Schwarzburg  Rudolstadt,  etc.,  represented,  accord- 
ing to  the  census  of  1831,  a  population  of  13,986,087  souls, 
and  contained  a  territory  of  5,278  square  German  miles. 
In  1833  it  had,  by  the  union  of  Electoral  Hesse  and  tbe 
increase  of  population,  augmented  the  number  of  suuls  to 
14,827,418,  and  the  territory  to  5,460  square  German  miles. 
The  States  of  Thuringia,  containing  about  900,000  inhabi- 
tants, had  also  their  commercial  and  toll  union  before  ther 
joined  the  Prussian  League  in  1833,  while  Bavaria,  Wiirtem- 
berg, Saxony,  and  Baden,  brought  between  8  and  9  millions 
of  population,  and  nearly  2,500  square  German  miles  of  terri- 
tory into  the  confederation. 

The  following  table  exhibits  the  population  of  the  States 
now  comprising  the  German  Custom-house  Union,  to  serve  as 
a  basis  for  the  Division  of  the  Receipts  at  Trienuial  Periods: 


:  I     th«ir 

i 

1     Prusiii 
whif 

an 
her  . 

2  1  Bavaria 

3  Saxony 

4  1  W.irii.ni 
6  {  Grand  I 

6  1  Elpctora 

7  1  (Jrand  1 
^    Tliiirinif 
0    Ducliy  0 

Total  i 

10 

Frankfor 

__ 

Total  f( 

THE  ZOLLVEREIN. 


177 


DefipiatioD  of  the  SUtM  »hleh 
hiTH  Kift-n  their  Mwut  in 
th«ir  own  nuue. 


1  Pnu«i«,  «nil  tlie  States 
which  have  come  to 
an  agreement  with 
her 

Bavaria  

Saxony    

4  I  Wiirifmherg     .    .    . 

5  :  Grand  Duchy  of  Raden 

6  I  Electorate  of  Hesse  . 

7  j  Orand  Duchy  of  Hesse 
M  ;  Thiiringiaii  States     . 
9    Duchy  of  Nassau  .    . 


Total  for  Division 
10  I  Frankfort »  .    .    .    . 


Total  for  Population . 


■atmtorur- 
ritorial  tn- 
parfleiM  in 
■qaanmllM. 


fa 
27lt 


"^ 


82 


4iWi 


8.252^ 


Bstant  of 
th*  OiMtom- 
houM  fron- 
tkrlnmllM. 


1.064x^5 


Population  aecording  to  tha 
Oeniui  aKrwd  upon  oa 
th«  81it  of  ItacMubar,  ia 


1834. 


1887. 


18,602,880 
4,251,118 

i,f)i>r),««)8 

1,027.122 

l,2;J7,(Jo7 

640,((74 

7«»,«yi 

<K»8,478 
873,601 


26,090,808 
60,000 


25,160,898 


14,318,250 

4,819,887 

1,662,114 

1,667,901 

1,264,614 

6r,2.7«l 

701,736 

0.-}l,340 

383,730 


26,982,883 
60,000 


26,042.888 


The  Zollverein  had  to  contend  with  a  stronj;;  opposition  in 
its  origin,  not  only  from  some  of  the  States  whose  local  posi- 
tion forced  them  into  the  union,  but  from  other  German 
fitatos  that  continued  independent,  for  the  tariff  pressed 
equally  on  all,  not  parties  to  the  League,  whetlier  neighbors 
UP  foreigners.  The  Prussian  tariffs  of  1818  had  been  strongly 
resisted  by  Electoral  Hesse,  Cassel,  and  other  States.  Saxony 
denounced  thom  as  hostile,  nay,  fatal  to  her  manufacturing 
and  commercial  interests.  Yet  it  cannot  be  denied  that  the 
tariffs  of  1818  were  a  great  improvement  upon  the  previously 
existing  legislation,  for  they  replaced  multitudes  of  prohibi- 
tims  and  prohibitory  duties  by  moderate  imports.  In  1826 
tile  question  of  a  union  between  Prussia  and  Hesse  Darm- 
stadt was  discussed,  and  an  inquiry  was  made,  in  case  Hesse 
Daiastadt  should  unite  with  Bavaria  and  Wiirtcmberg, 
whether  Prussia  would  be  willing  to  entertain  the  subject 

'  The  population  of  Frankfort  is  not  taken  into  the  Division  of  the  Reve- 
KUM,  ti  this  town  receives  an  inalienable  and  invariable  sum  calculated  on  the 
'Mil  of  a  population  of  60,000  souls  (63,036). 

IS 


1:     ' 

■'T^' 


1:1. 


178 


ECONOMIC  HISTORY. 


of  a  commercial  treaty.  The  first  answer  of  Prussia  was 
unfavorable,  but  the  difficulties  were  at  last  surmounted,  and 
the  League  before  referred  to  was  formed  between  Prussia 
and  Hesse  Darmstadt,  of  which  the  Prussian  tarifiF  of  18is 
was  the  basis,  the  custom-houses  between  the  two  countries 
being  wholly  removed,  —  each  State,  however,  reserved  the 
right  to  establish  duties  of  consumption  on  sundry  articles  of 
food  and  drink ;  and  Prussia  was  allowed  to  maintain  tlie 
monopoly  of  salt  and  playing-cards. 

The  objects  proposed  by  the  Zollverein  were  the  removal 
of  all  restrictions  to  communication  and  transit,  the  abolition 
of  all  internal  custom-houses,  the  establishment  of  a  common 
tariff  and  system  of  collection,  and  the  repartition  of  the 
receipts  on  all  imports  and  exports  according  to  the  popu- 
lation among  all  the  members  of  the  League.  The  States 
reserved  to  themselves  the  right  of  introducing  any  local 
arrangements  which  did  not  interfere  with  the  general  princi- 
ples, —  of  nominating  the  functionaries  of  their  own  districts, 
and  of  examining  the  accountancy  of  any  part  of  the  League. 
The  League  is  bound  not  to  interfere  with  matters  of  local 
revenue,  such  as  port-dues,  turnpikes,  tolls,  etc.  The  Prussian 
tariff  of  1818  was  recognized  as  establishing  the  maximum  of 
duties.  It  was  determined  that  a  common  system  of  moneys, 
weights,  and  measures,  should  replace,  as  soon  as  possible, 
the  various  complicated  and  discordant  usages  of  the  dif- 
ferent States  of  the  union,  and  that  the  whole  influence  of 
the  union  should  be  directed  towards  the  extension  of  its 
commercial  relations  with  other  States.  The  intention  of 
the  tariff  is  to  admit  raw  materials  without  any,  or  on  merely 
a  nominal  duty.  The  lightest  duty  levied  is  on  silk  goods. 
amounting  to  110  dollars  per  cwt.,  or  about  3  shillings  ster- 
ling per  lb.*  The  common  rate  of  duty  is  half  a  dollar,  or 
1«.  6c?.  per  cwt.  on  all  articles  not  specially  excepted.  The 
tariff,  as  fixed  by  the  Congress  which  has  just  closed  its 
labors,  will  be  found  in  the  Appendix  IL  (Pari.  Doc,  p.  78). 

It  would  ill  become  me,  in  this  report,  to  discuss  —  though 

1  The  duty  levied  by  the  Eogliih  tariff  on  tilk  goods  it  from  lli.  to27i.<<i> 
per  lb. 


.     I,: 


THE  ZOLLVEREIN. 


179 


I  cannot  pass  over  in  absolute  silence — the  probable  political 
consequences  of  the  establishment  of  the  Zollverein.  They 
certainly  were  not  lost  sight  of  by  its  founders.  The  intimate 
connection  between  commercial  and  political  interests  is  obvi- 
ous; and  the  advocates  of  the  League  did  not  fail  to  perceive 
that  no  political  alliance  would  be  so  strong  as  that  based 
upon  a  community  of  pecuniary  and  social  interests.  The 
jarring  of  differently  constituted  institutions,  the  local  jeal- 
ousies which  still  exert  their  influences,  the  clashing  of 
personal  and  privileged  interests  with  the  public  weal,  have 
l)revcnted,  to  a  certain  extent,  the  fusion  which  would  other- 
wise have  taken  place,  so  that  the  political  and  the  commercial 
policy  are  not  always  identified ;  but  it  cannot  be  denied  that 
under  a  wise  direction  the  machinery  of  the  Zollverein  Avould 
become  a  very  mighty  political  engine,  which  would  be 
brought  to  bear  with  great  power  upon  the  future  concerns 
of  Europe  and  the  world  at  large. 

The  general  feeling  in  Germany  towards  the  Zollverein  is, 
that  it  is  the  first  step  towards  what  is  called  the  German- 
nation  of  the  people.  It  has  broken  down  some  of  the 
strongest  holds  of  alienation  and  hostility.  By  a  community 
of  interests  on  commercial  and  trading  questions  it  has  pre- 
pared the  way  for  a  political  nationality,  —  it  has  subdued 
much  local  feeling,  prejudice,  and  habit,  and  replaced  them 
by  a  wider  and  stronger  element  of  German  nationality. 

The  Zollverein,  by  directing  capital  to  internal,  in  prefer- 
ence to  external  trade,  has  already  had  a  great  influence 
in  improving  the  roads,  the  canals,  the  means  of  travelling, 
the  transport  of  letters,  —  in  a  word,  in  giving  additional  im- 
imise  to  inland  communications  of  every  sort.  The  isolation 
of  the  several  German  States,  with  separate  fiscal  interests, 
and  often  hostile  legislation,  prevented  those  facilities  from 
l)eing  given  to  intercourse  which  are  alike  the  evidence  and 
the  means  of  civilization.  On  every  side  beneficial  changes 
are  taking  place.  Railways  are  being  constructed  in  many 
parts  of  the  German  territory,  steamboats  are  crowding  the 
flerman  ports  and  coasting  along  the  German  shores ;  every- 
thing is  transported  with  greater  cheapness  and  rapidity. 


n  :■'      7 


■^ 


r- 


180 


ECONOMIC  HISTORY. 


¥' 


'i.'.i' 


But  whatever  o{)inions  may  be  formed  as  to  the  effect  of 
the  Commercial  League  upon  British  interests,  it  is  now  too 
late  to  discuss  tliem  beneficially.  The  League  exists,  and  is 
not  likely  to  be  broken  up ;  the  separate  interests  of  the 
different  States  are  blended  in  the  common  interests  of  the 
ZoUverein ;  all  the  topics  of  comparison  between  the  general 
tariff  and  the  tariffs  which  previously  existed  in  the  various 
inde|)endent  States  of  the  union  are  now  removed ;  vhatcver 
existed  of  local  fiscal  influence  is  merged  in  the  common  alli- 
ance, and  the  League  must  now  be  accepted  and  treated  with 
as  a  body  more  influential  than  were  any  of  its  members.— 
capable  of  controlling  the  smaller  influences  of  its  comi)oneDt 
parts  by  the  concentrated  influence  of  the  whole. 

It  is  natural  that  a  body  so  powerful  as  the  Commercial 
League  should  seek  to  extend  its  influence.  More  coasts, 
more  ports,  and  more  shipping  are  the  three  desiderata  which 
are  put  forward  by  its  advocates  and  members.  For  the 
coasts  and  the  ports  of  the  Baltic  belonging  to  the  union  are 
so  much  cramped  and  prejudiced  by  the  Sound  dues  that  thev 
cannot  meet,  in  any  of  the  great  emporiums  of  trade  out  of 
the  Baltic,  the  competition  of  the  ports  and  coast  south  of  the 
Baltic ;  while  the  ports,  such  as  Hamburg,  Rotterdam,  etc., 
which  are  the  natural  outlets  of  the  great  rivers  which  run 
through  the  provinces  of  the  League,  all  belong  to  States  not 
assi (dated  with  it.  The  subject  has  been  discussed  (»f  giving 
a  flag  to  the  ZoUverein,  as  it  has  already  a  coinage;  but  to 
possess  a  marine,  both  warlike  and  commercial,  in  order  to 
compete  with  the  growing  squadrons  of  Russia,  and  to  be  on 
a  level  with  the  Hanse  Towns  and  with  Holland,  is  an  object 
much  insisted  on,  but  which  does  not  seem  to  jjrcsent  any 
immediate  prospects  of  realization. 

On  the  30th  of  July,  1838,  an  arran,5oment  was  made 
(Appendix  III.,  Pari.  Doc.,  p.  95)  for  introducing  a  unity  of 
currency,  to  take  effect  from  the  1st  of  January,  1841,  the 
unity  to  consist  of  the  mark,  weighing  233^(^j/'f  grammes. 

The  mark  to  be  represented  by  fourteen  dollars;  the  dollar 
by  1|  florins ;  and  the  florin  to  be  ^  of  a  dollar. 

The  accounts  to  be  kept  either  in  dollars  (Prussian  crovng) 
or  florins  (guilders). 


ii    ' 


THE  ZOLLVEREIN. 


181 


Two  millions  of  pieces  of  two  dollars  each  are  to  be  coined 
lioforc  the  Ist  of  January,  1842.  The  coinage  has  already 
Won  introduced ;  it  bears  the  effigies  of  the  King  of  Prussia, 
anil  has  on  the  reverse  the  inscription  of  Vereim  MUmej  or 
'•  Aftftociation's  Money." 

The  future  influences  and  direction  of  the  ZoUverein  will 
y  determined  not  alone  by  the  growing  strength  of  tlie  inter- 
ests it  represents,  but  by  the  direction  which  foreign  nations 
tradinir  with  Germany  may  be  able  or  willing  to  give  to  their 
own  commercial  legislation ;   for,  however  enlightened  may 
k  the  policy,  and  however  sincere  the  purpose,  of  the  states- 
men of  Germany  to  prevent  the  League  bccuming  an  in- 
Dtrument  for  advancing  the  minor  interests  of  certain  classes 
of  producers,  as  opposed  to  the  major  interests  of  greater 
|injilucers,  and  to  the  general  interests  of  the  whole  body 
uf  consumers,  all  experience  shows  that  the  minor  interest, 
lioin<r  more  youthful,  vigorous,  and  concentrated,  weighs  in 
the  balance  for  much  more  than  its  real  value.     The  agricul- 
tural interest,  for  example,  which  in  the  States  of  the  union 
is  the  most  diffused,  the  most  important,  and  the  most  pro- 
iliictivc,  will  not,  in  the  contest  with  the  rising  manufacturing 
interest,  obtain  its  full  share  of  power,  dependent  as  it  must 
naturally  be  to  a  great  extent  on  the  demands  of  foreign 
markets.    F^or  it  is  to  foreign  markets  alone  it  can  look  for 
the  sale  of  that  surplus  produce  which  home  demand  does  not 
consume,  and  which,  as  long  as  it  remains  without  vent,  must 
create  a  depression  in  the  price  of  the  whole  quantity  pro- 
duced.   Hitherto  the  operation  of  the  Zollverein  has  been  to 
strcnjrthen  the  manufacturing  interest  at  the  expense  of  the 
amcultural.    As  the  foreign  demand  for  agricultural  produce 
has  been  uncertain  and  capricious,  the  low  average  prices 
liave  operated,  on  the  one  hand,  in  forcing  capital  out  of 
aL'ricuhural  into  manufacturing  channels;   while  the  cheap 
price  of  food  has  given  to  the  German  artisan  great  advan- 
taseg  in  his  competition  with  the  labor  of  countries  in  which 
the  price  of  food  is  relatively  higher. 
Were  foreign  markets  accessible  to  the  German  agricul- 
t>ifist,  there  is  no  doubt  the  flow  of  capital  towards  manu- 


f*; 


I 


t 


182 


ECONOMIC  HISTORY. 


factures  would  bo  checked,  first  by  the  increased  demand  for 
agricultural  labor,  and,  secondly,  by  the  loss  of  the  advantage 
which  the  German  artisan  now  possesses  in  the  comparative 
cheapness  of  food.  For  the  prices  of  the  countries  which 
would  be  importers  of  German  corn,  for  example,  would  deter- 
mine the  prices  of  corn  in  the  German  markets  for  the  Ger- 
man consumer.  In  his  own  market  he  must  give  the  same 
price  as  the  foreign  buyer  who  comes  into  that  market. 

One  of  the  groat  difficulties  with  which  sound  commercial 
principles  have  had  to  contend,  in  Germany  as  elsewhere,  is 
the  too  general  adoption  of  a  phraseology  which  has  grovm 
out  of  a  vicious  legislation,  and  has  to  a  great  extent  popu- 
larized error.  High  duties  on  imported  articles  arc  justified 
by  the  plea  that  it  is  necessary  to  afford  protection  to  tin 
producer^  while  the  substantial  fact  of  the  consequent  iacri^a 
of  the  consumer  is  wholly  kept  out  of  view.  For  one  case  in 
which  the  lots  to  the  many  is  put  forward,  there  are  a  thousand 
in  which  the  profits  to  the  few  are  urged  as  sufficient  sanction 
to  perverse  legislation. 

Dieterici  *  gives  a  very  curious  table  (n.  127),  showing  the 
operation  of  the  Zollverein  during  the  years  1833  to  1835,  on 
imported  articles. 

On  foreign  articles  of  consumption  not  coming  into  compe- 
tition with  German  articles  the  increase  in  the  three  years  is 
as  fifty.four  to  forty-six ;  in  foreign  articles  of  consumption 
competing  with  German  articles  the  decrease  is  as  twenty- 
four  to  twenty-nine  ;  in  half-manufactured  articles  serving  for 
further  labor  the  increase  is  only  from  9,161  to  9,620 ;  while 
in  wholly  manufactured  articles  the  decrease  is  from  thirteen 
to  ten.  ... 

The  facilities  created  for  communication  by  the  improve- 
ment of  roads,  canals,  etc.,  have  greatly  aided  the  inland 
trade  of  Germany.    At  the  close  of  the  last  war  there  were  no 

*  I  have  had  occasion  conitantly  to  consult  Dieterici's  "  Statiituche  Uebw- 
alnht  der  wichtigsten  Gegenstande  des  Verkehn  und  Verbrauchs  im  Preuu- 
■chen  Staate  und  im  Deutschen  Zollverbande,  von  1831  bis  1886,  aus  amtlichn 
Quellen  dargestellt,"  Berlin,  1838.  Tlie  valuable  facts  he  has  collected  will  be 
found  scattered  over  the  whole  of  this  report. 


'  'f  - 

Il 

;| 

1 

:    i)i    ■ 

T.'i 


THE  ZOLLVEREIN. 


188 


roads  of  the  first  class  either  in  Pomerania,  Posen,  or  Prussia 
proper.  In  1816  the  number  of  Gorman  miles  laid  down  in 
Chausies  was  523f  =  2,408  English;  in  1828  it  was  1,062|  = 
4,889 ;  and  in  1831, 1,228^  =  «5,610 ;  and  this  amount  has  been 
greatly  increased  at  the  present  time. 

Of  the  activity  of  communication,  the  following  official 
returns  of  the  quantities  of  goods  which  passed  through  Prieg- 
nitz  will  furnish  remarkable  evidence :  — 


Yeui. 

1 

( 

1 

1 

1 

1 

1 

ToUlIn 
Cwt. 

1830 

Cwt. 
246,934 
22&,412 
246,146 
260,664 
307.087 

Cwt. 
683,020 
595,610 
730,289 
700,858 
027,764 

Cwt. 
446,667 
619,086 
640,246 
477,970 
766,088 

Cwt. 

48,832 

46,674 

68,297 

82,962 

26,676 

Cwt. 
188,813 
168,196 
147,617 
132,612 
221,628 

Cwt. 

Cwt. 

Cwt. 

168,814 
84,088 
94,809 
80,696 

906.112 

1,716,968 
l,«28,06t 
1,878,19» 
1,746,106 
8,226,098 

1831.  .    . 

1832.  .    . 

1833.  .    . 

1834.  .    . 

40,988 
67,218 
60,918 
70.728 

•        •       • 

18,489 

9,694 

11,067 

It  must  not  be  forgotten  that  Great  Britain  had  long  enjoyed 
peculiar  advantages  in  the  facilities  of  communication ;  and  to 
these  facilities  much  of  the  activity  and  success  of  her  manu- 
facturing and  commercial  industry  is  attributable.  For  many 
years  her  progress  in  this  respect  created  almost  a  monopoly 
of  benefit ;  but  the  advantages  she  enjoyed  are  now  partici- 
pated in  by  other  nations ;  and  in  Germany  especially  great 
advances  have  been  made,  and  continue  to  be  made,  in  all 
those  improvements  which  facilitate  intercourse. 

It  is  obvious  that  England  cannot  long  maintain  exclusive 
possession  of  advantages  which  civilized  man  is  everywhere 
successfully  struggling  to  obtain.  Railroads  are  now  being 
introduced  between  the  principal  towns  in  the  Zoliverein,  — 
those  between  Dresden  and  Leipzig  and  between  Berlin  and 
Potsdam  are  completed,  many  others  are  begun,  and  a  still 
greater  number  are  projected;  and  in  these  enterprises  the 
undertakers  have  all  the  advantages  of  our  experience.    The 


■w 


184 


ECONOMIC  HISTORY. 


r' 


number  of  canals  has  considerably  increased ;  steamers  are 
giving  great  development  to  river  navigation ;  and  even  in 
those  branches  of  industry  in  which  our  superiority  la  the 
most  marked,  such  as  the  manufacture  of  machinery,  com- 
petition is  marching  after  us  with  rapid  strides. 

But,  iudciicndontly  of  the  progress  of  Germany  towards  a 
participation  in  the  advantages  which  for  a  series  of  years 
have  been  almost  exclusively  possessed  by  Great  Britain,  she 
has  aptitudes  und  facilities  of  her  own  which  must  greatly  aid 
her  in  the  development  of  her  industry.  The  frujral  and 
economical  habits  of  the  German  people  enable  tlicni  to  pro- 
cure a  far  greater  proportion  of  comforts  for  the  sunie  jiro- 
portional  rate  of  wages  than  are  generally  obtained  by  the 
English  laborer ;  added  to  which  a  simpler  mode  of  life,  a 
smaller  consuription  of  animal  food,  and  a  less  costly  class  of 
garments,  leave  out  of  their  smaller  earnings  a  larger  amount 
of  savings.  Their  savings  are,  for  the  most  part,  invested  in 
the  purchase  of  the  house  in  which  they  dwell,  and  tlie  parden 
which  they  cultivate,  —  whose  cultivation  is  alilte  a  source  of 
health,  enjoyment,  and  profit,  being  in  most  cases  a  valuable 
auxiliary  to  manufacturing  industry.  Nor  ought  the  general, 
the  almost  universal  education  of  the  population,  be  forgotten 
as  immensely  contributory  to  the  public  prosperity.  Elemen- 
tary instruction  is  provided  for  all,  and  special  instruction  for 
those  who,  in  any  department  of  art  or  industry,  exhibit  any 
particular  a])titude.  I  have  given  in  the  Appendix  (IV.,  Pari. 
Doc,  pp.  96-97),  a  short  account  of  the  Gewerbe-Schule  at 
Berlin,  which  under  the  admirable  superintendence  of  M. 
Banth  (whose  services  to  his  country  are  beyond  all  estimate, 
and  above  all  praise),  has  first  gathered  from  every  i)art  of 
the  kingdom  the  youths  best  fitted  for  scientific  training;  and, 
after  a  thorough  course  of  education,  has  again  dispersed  them 
over  the  country.  The  gradual  dififusion  of  a  knowledge  and 
a  taste  for  art  over  the  whole  field  of  German  industry,  its 
happy  influence  upon  all  manufactures,  exhibited  in  a  thou- 
sand evidences  of  improvement,  are  obvious  to  every  observer. 
Manual  skill  and  experience,  more  and  more  intimately  asso- 
ciated with  scientific  instruction,  have  been  long  preparing 


THE  ZOLLVEREIN. 


185 


the  most  important  results ;  and  when  the  rising  generation 
of  intelligunt  artisans  bring  their  information  and  taste  into 
the  wide  region  uf  manufacturing  and  commercial  competi- 
tiun,  there  can  bo  no  doubt  of  their  contributing  largely  to 
the  general  wealth  and  weal. 

The  tariff  of  the  ZoUverein  has  no  other  prohibitions  than 
those  of  8alt  and  playing-cards,  which  are  monopolies  in 
Prussia;  and  the  principle  of  the  tariff  is  to  admit  raw 
material,  and  materials  serving  the  ends  of  agriculture  and 
maauf  acta  res,  either  on  very  low,  or  without  any  duties. 
Thus,  raw  cotton,  wool,  coals,  pig-iron,  ores,  raw  hides,  and 
8i(ins,  hare  and  rabbit  skins,  potashes,  common  pottery,  tur- 
pentine, common  furniture,  chalk,  rags,  raw  refuse  of  sundry 
manufactures,  trees  for  planting,  manure,  earths,  fish,  grass 
and  hay,  garden  produce,  birds,  blacklead,  worn  clothes, 
precious  metals,  wood,  turf,  fresh  fruit,  milk,  seeds,  etc.,  pay 
no  duties  at  all. 

The  objections  to  the  tariff  of  the  ZoUverein  are  twofold ; 
they  refer  to  the  amount  of  duties  levied,  and  to  the  manner 
in  which  they  are  levied. 

The  duties  are  far  higher  than  the  Prussian  government 
professed  its  intention  to  levy.  They  were  intended  to  repre- 
sent the  tariffs  of  Prussia.  Now,  in  the  communication  of 
Baron  Maltzahn  to  Mr.  Canning,  dated  Dec.  25,  1825,  and 
laid  before  Parliament,  by  order  of  Her  Majesty,  in  answer 
to  the  address  of  the  House  of  Commons  of  Ist  July,  1839, 
the  words  of  the  Prussian  minister  are  as  follows :  — 

"No  one  of  the  duties  on  imports  is  sufficiently  high  to 
prevent  the  importation  of  foreign  products,  as  is  proved  by 
their  extensive  sale  in  all  parts  of  the  monarchy.  The  duties 
levied  on  the  products  of  foreign  fabrics  or  manufactures 
are  generally  only  ten  per  cent  on  their  value ;  on  some  they 
amount  to  fifteen  per  cent,  but  there  are  many  which  are 
more  moderate." 

But  these  representations  are  certainly  not  borne  out  by 
facts;  for,  not  only  do  the  duties  levied  on  manufactures  vary 
from  twenty  to  eighty  per  cent  (instead  of  from  ten  to  fifteen 
per  cent),  but  there  are  great  varieties  of  goods  which  are 


m 


ECONOMIC  HISTOUY. 


wholly  excluded  from  the  Pruggian  markets  in  consequence 
of  the  elevation  of  the  tariff. 

The  manner  in  which  the  duties  are  levied  is  such  as  to 
press  most  severely,  with  reference  to  their  cost,  on  coarse, 
inferior  and  heavy  articles ;  those  least  able  to  bear  a  high 
rate  of  duty  are  most  imposed,  the  same  amount  of  duty  bciiij^ 
taken  on  all  species  of  goods  made  of  the  same  raw  materiuj, 
—  the  finest  qualities  pay  the  least,  and  the  lowest  qualities 
the  highest  amount.  Tlie  ad  valorem  principle,  wliich  ifi  iu 
its  nature  the  fairest,  because  it  distributes  taxation  by  the 
measure  of  wealth  and  expenditure,  is  wholly  lost  sight  of, 
and  the  goods  employed  by  the  poor  arc  visited  by  a  much 
heavier  rate  of  taxation  than  those  by  the  opulent.  The 
richest  muslin  and  the  coarsest  calico,  the  cloth  of  Sedan  and 
the  serge  of  Devon  pay  the  same  amount  per  cwt.  Hence 
articles  of  low  quality  —  such  as  are  used  by  the  many,  such 
as  would  have  the  largest  sale  —  are  wholly  excluded  from 
the  markets  of  the  League. 

It  cannot  be  disputed  that  the  ad  valorem  systcni,  as  applied 
to  manufactures,  has  many  inconveniences  and  dUricultics.  It 
is  not  easy  always  to  ascertain  even  the  approximative  value; 
and  with  the  number  of  custom-houses  by  which  goods  are 
allowed  to  be  imported  through  a  frontier,  both  of  sea  and 
land,  so  various  and  extensive  as  that  of  the  Commercial 
League,  it  would  be  out  of  the  question  to  seek  for  a  sufficiency 
of  custom-house  functionaries,  with  knowledge  and  cxi)crience 
competent  to  the  protection  of  the  revenue  against  fraud. 
Tliere  is  no  system  so  simple  as  that  of  weight ;  it  is  iutelli- 
gible  to  everybody  ;  it  is,  too,  a  generally  popular  system,  a« 
it  affords  no  latitude  for  the  caprice  of  the  officer,  and  opens 
no  door  to  the  frauds  of  the  importer.  It  might  probablj 
be  associated  with  some  classification  of  articles,  if  not  too 
detailed  or  complicated,  into  a  few  great  divisions ;  but  the 
desirableness  of  a  thorough  change  in  the  system  itself  maj 
well  be  doubted,  and  such  a  proposal  is  not  likely  to  be 
entertained. 

The  Americans  have  strongly  objected  to  the  system  of 
levying  duties  by  weight,  instead  of  on  value.    They  hs^* 


THE  ZOLLVEREIN, 


187 


reprcseiited  that  the  duty  of  6J  dollars  on  their  tobacco,  being 
the  same  as  that  levied  on  the  tobaccos  of  the  Havana  and 
the  Spanish  colonics,  is,  in  fact,  a  discriminating  duty  on 
their  produce,  even  to  the  extent  of  two  hundred  to  three 
hundred  dollars  i*cr  cent.  They  complain  that  while  the 
duties  in  the  United  States  on  the  articles  imported  from 
Germany  do  not  upon  the  whole  amount  pay  more  than  an 
average  of  6|  per  cent,  the  imports  from  the  United  States 
iuto  the  ZoUverein  pay  forty-six  per  cent  duty.  They  re- 
present that  Prussia  levies  on  American  produce  a  gross 
revenue  of  776,606  dollars;  and  while  the  United  States 
receive  only  159,663  dollars  from  impoi-ts  of  the  ZoUverein. 
Of  about  four  millions  of  dollars  exported  from  the  Com- 
mt  cial  League  to  the  United  States  three  millions  (one  and 
one-half  millions  of  linens,  one  million  of  silk,  and  half  a  mil- 
lion merino  and  other  similar  articles)  pay  no  duty  at  all. 
The  remaining  million  is  principally  composed  of  glass,  hard- 
ware, hosiery,  etc.,  paying  from  twenty  to  twenty-five  per 
cent. 

The  original  intention  of  the  Prussian  tariff  has  certainly 
been  much  departed  from,  and  the  general  principle  which 
was  put  forward  has  not  been  carried  out  in  its  details.    For 
not  only  did  the  Prussian  government,  in  its  official  corre- 
spondence, declare  that  it  was  its  purpose  not  to  lay  duties 
exceeding  from  ten  to  fif>ecn  per  cent,  but  the  Commercial 
League  itself  professed  to  make  the  Prussian  tariff  the  basis 
of  the  legislation  of  the  union ;  and  the  maximum  intended 
to  be  established  by  the  Prussian  tariff  was  an  ad  valorem 
ten  per  cent  on  manufactures ;  for  that  tariff  provides  that 
''The  duty  on  consumption  in  foreign  fabrics  and  manufac- 
tured goods  shall  not  exceed  ten  per  cent ;  and  it  shall  be 
less,  whenever  a  smaller  duty  can  be  imposed  without  injury 
to  the  national  industry."  ^    But  the  duties  levied  being,  on 
cotton  manufactures,  £7  10».  per  cwt.;  on  woollens,  £i  10«.; 
on  hardware,  £8  5«.;  on  common  linens,  338. ;  on  fine  linens, 
^3  6».;  and  on  silks,  £16  10«.,  per  cwt, — do,  on  the  whole, 


1  <« 


Allgemeine  Zeituog,"  2d  December,  1834. 


r'' 


188 


ECONOMIC  HISTORY. 


m 


i'    ■ 

f 

greatly  exceed  the  proposed  ten  per  cent.  The  system  of 
imposing  the  duty  by  weight  has  the  advantage  of  great  sim- 
plicity, but  it  acts  in  complete  hostility  to  the  ad  valorem 
principle,  as  the  duty  increases,  instead  of  diminishing,  with 
the  lowness  and  coarseness  of  the  article ;  so  that  the  o]jer- 
ation  of  the  tariff  is  as  complete  an  exclusion  of  every  low- 
priced  manufacture  as  if  it  were  absolutely  prohibited.  Under 
the  influence  of  this  statu  of  things,  the  duty  on  cottun  goodti 
varies  from  three  and  one  half  to  one  hundred  and  twcnty 
per  cent. 

It  has  been  remarked  that  this  system  fails  in  the  very  ends 
proposed,  namely,  to  distribute  the  amount  of  [)rotection  in 
proportion  to  the  backwardness  of  the  manufacture.  On  cer- 
tain articles  the  amount  of  duty  is  so  heavy  as  completely  tu 
exclude  foreign  competition,  where  the  home  pruduction  re- 
quires no  such  encouragement  as  that  afforded  by  the  tariff; 
and  on  others,  where  a  protecting  duty  is  required  by  the  con- 
dition of  the  home  production,  the  duty  on  the  foreign  article 
is  small,  and  insufficient  to  check  its  introduction.  Hut  the 
general  result  of  the  tariff  is  to  exclude  the  foreign  articles  of 
low  quality  and  general  consumption,  and  thus  to  keep  the 
large  demand  exclusively  for  the  home  manufacturers.  One 
baneful  effect  is,  however,  that  the  increased  price  is  levied 
on  those  who  are  least  able  to  pay,  and  levied  on  articlc!^  of 
the  lowest  value,  for  the  piece  goods  which  are  consumed  by 
the  opulent  are  precisely  those  upon  which  the  smallest  amount 
of  duty  is  collected. 

It  has,  indeed,  been  argued  that  the  levying  heavy  duties 
upon  manufactures  of  ordinary  quality,  so  as  to  exclude  them 
from  the  markets  of  the  league,  is,  in  fact,  to  create  a  demand 
for  superior  articles,  and  so  confer  a  benefit  upon  the  German 
consumer;  but  to  the  immense  multitude  of  consumers, wf 
is  the  all-important  consideration ;  and  to  deny  access  to  loff- 
priced  articles  —  or  by  prohibitory  duties  on  foreign  fabrics, 
considerably  to  elevate  the  price  of  the  home-made  article - 
is,  in  all  cases,  to  levy  an  unfair  and  unequal  contribution  on 
the  poor,  and  in  many  cases  wholly  to  exclude  thera  from  the 
enjoyment  of  what  would  otherwise  be  accessible  to  them.  Iq 


i: 


THE  ZOLLVEREIN. 


189 


fact  to  exclude  the  ordinary  manufactures  of  foreign  countries 
is  to  give  a  special  premium  to  the  production  of  ordinary 
manufactures  at  home,  is  to  create  for  the  least  advanced, 
the  least  intelligent  industry,  a  field  of  peculiar  favor;  and 
it  mav  be  well  doubted  if  the  monopoly  thus  established  for 
the  manufacture  of  low  articles  is  beneficial  to  them.  That 
it  is  prejudicial  to  the  consumers  is  obvious,  but  some  of  the 
ablest  writers  on  the  Zollverein  have  expressed  their  convic- 
tion that  the  uncontrolled  power  given  to  the  German  manu- 
facturer of  low  articles  in  the  German  market  is  baneful  as 
well  to  his  own  as  to  the  public  interest.* 

The  tendency  of  opinion  in  Germany  is  towards  free  trade. 
Almost  every  author  of  reputation  represents  the  existing 
system  as  an  instrument  for  obtaining  changes  in  favor  of 
commercial  liberty.  One  of  the  most  distinguished  writers 
on  the  Commercial  League,  in  cautioning  the  capitalist  from 
embarking  his  wealth  in  the  protected  branches  of  industry, 
says, "  You  are  building  ships  which  are  not  prepared  for  the 
storm.  You  are  creating  interests  which  cannot  make  their 
way  through  a  crisis;  you  are  erecting  edifices  upon  sand."' 

It  should  be  borne  in  mind,  however,  that  the  tariffs  of  the 
Zollverein  are  far  more  liberal  than  the  old  tariffs  of  Prussia, 
which  were  intended  wholly  to  exclude  foreign  manufactures. 
But  diminished  duties  have  not  injured  her  own  manufactures. 
Xo  man  is  found  to  deny  that  they  have  made  a  much  greater 
progress  under  a  less  protection  than  they  made  when  the 
home  market  was,  by  a  greater  protection,  closed  against  for- 
eign competition. 

The  Prussian  tariff  of  1818  was  a  great  improvement  on 
preceding  legislation,  but  it  contained  many  incongruities, 
which  were  changed  by  the  tariff  of  1822.  On  many  articles 
tlie  duties  varied  between  the  eastern  and  western  provinces. 
Common  cloths,  which  paid  26  rix-d.  22|  gr.,  and  fine  cloths 
paying  47  rix-d.  10|  gr.  in  the  eastern  provinces,  paid  only 
-2  rix-d.  \%\  gr.,  and  43  rix-d.  7 J  gr.  in  the  western ;  cotton 

'  See  Oiinnder,  "  Betrachtungen  ttber  den  ZoU  Preussischen  Tarif."    Stut- 

P«.  1837,  pp.  81>,  90. 
'  See  Osiander,  "  Betrachtungen,"  p.  97. 


if:''    1 

j"!  'J 

|l'''      ■■■ 
■ 

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i;.,' 
r 

rt      ' 

■,  "'■ 

|.'jt  : 


190 


ECONOMIC  HISTORY. 


twist  paid  2  rix-d.  10  gr.  in  the  eastern,  and  only  half  that 
amount  iti  the  western  provinces;  while  dyed  twist  paid 
6  rix-d.  17|  gr.  in  the  former,  and  5  rix-d.  17^  gr.  in  the 
latter.  White  and  colored  woven  cottons  and  cottons  mixed 
with  thread  paid  the  same  duties  as  fine  woollens,  naraelv, 
47  rix-d.  10|  gr.  and  43  rix-d.  7J  gr. ;  and  printed  and  fine 
cottons,  61  rix-d.  3|  gr.  in  eastern,  and  57  rix-d.  in  western 
districts;  gray  linens  2  rix-d.  and  1  rix-d.  22^  jrr.,  and 
bleached,  12  rix-d.  6|  and  8  rix-d.  8^  gr. ;  silks,  171  rix-d. 
8|  gr.  in  the  eastern,  and  167  rix-d.  in  the  western  depart* 
ment;  half  silks,  79  rix-d.  13 J  gr.,  and  75  rix-d.  10  gr. 
Common  iron  goods  paid  6  rix-d.  17J  gr.  in  the  oast,  and 

5  rix-d.  21  gr.  in  the  west ;  fine  iron  goods,  24  rix-d.  12^  gr., 
and  20  rix-d.  10  gr. ;  and  cutlery  and  fine  hardware,  79  rix-d. 
13J  gr.,  and  75  rix-d.  10  gr.  The  tariff  of  1822  left  the 
distinction  only  existing  on  cotton  twist ;  introduced  a  uni- 
form duty  of  30  rix-d.  on  woollens,  and  6  rix-d.  on  dyed  twist; 
60  rix-d.  on  cottons  generally,  but  reduced  the  duty  on  cot- 
tons mixed  with  thread  to  10  rix-d.,  which  it  also  levied  on 
bleached  linens;  lowered  the  duties  on  silks  to  100  rix-d., 
and  on  half-silks  to  50  rix-d. ;  on  common  iron  goods  levied 

6  rix-d.;  on  fine,  10  rix-d.;  and  on  cutlery  and  hardware, 
60  rix-d. 

Thus  the  tariff  of  1822  was  in  every  respect  an  improve- 
ment on  that  of  1818.  In  1825  the  duties  on  woollen  warps 
were  reduced  from  30  rix-d.  to  10  rix-d.;  and  those  on  car- 
pets of  wool  and  thread  from  30  rix-d.  to  20  rix-d. ;  those  on 
fine  linens  and  cottons  mixed  with  flax  were  raised  from 
10  rix-d.  to  20  rix-d.  In  1828  the  duties  on  flannels,  moi- 
tons,  etc.,  were  reduced  from  30  rix-d.  to  10  rix-d.,  and  on 
woollen  carpets  from  30  to  20  rix-d. 

Up  to  this  period  half  the  duty  was  payable  in  friederick 
cTor^  which  was  an  augmentation  of  about  six  per  cent  upon 
the  tariff.  In  1882  the  duty  on  woollen  yarn  was  lowered 
from  6  rix-d.  to  15  silver  gr. ;  on  carpets  in  general  it  was 
lowered  from  80  rix-d.  to  22  rix-d. ;  on  woollens  it  was  raised 
from  80  rix-d.  to  88  rix-d.;  on  cotton  yams  2  rix-d.  were 
established  as  a  general  duty ;  56  rix-d.  on  cottons  and  cut- 


->!    '  I- 


THE  20LLVERE1N. 


191 


lery,  instead  of  50,  which  50  continued  to  be  levied  on  cotton 
and  flax  manufacturers;  and  the  duties  on  silk  were  raised 
from  100  rix-d.  to  110  rix-d.  The  tariff  of  the  Zollverein, 
in  1834,  reduced  the  duty  on  carpets  from  32  rix-d.  to 
20  rix-d.;  and  on  woollens  generally  from  83  rix-d.  to 
30  rix-d.;  on  cottons  from  55  rix-d.  to  50  rix-d.  Tlie  duty 
on  linen  thread  was  raised,  in  1837,  from  6  rix-d.  to  8  rix-d. ; 
and  on  twisted  cotton  to  the  same  amount.  The  tariff  of 
1840  has  lowered  the  duties  on  cutlery  and  hardware  from 
i)h  rix-d.  to  50  rix-d. 

The  changes  introduced  by  the  Congress  of  1839  into  the 
tariffs  of  1837-39,  are  not  very  considerable.  The  adoption 
of  the  unity  of  50  kil.  as  the  cwt.  of  the  tariff,  operates  as 
an  elevation  of  2f  per  cent,  in  all  cases,  when  it  applies  to 
articles,  the  duty  on  which  is  charged  by  weight,  as  is  the 
case  with  the  major  part  of  the  goods  mentioned  in  the  tariff. 
The  system  of  tarification  has  been  simplified  throughout  by 
the  cutting  off  all  fractions  of  lbs.  The  most  important 
change  is  the  reduction  of  the  sugar,  rice,  and  hardware  du- 
ties. . . .  The  standard  of  the  florin  is  altered  from  24  gold 
standard  to  24^  gold  standard ;  so  that,  under  the  new  tariff, 
the  rix  dollar  is  now  represented  by  1}  fl.,  instead  of  I3,  as 
in  the  former  tariff.  Thus,  the  general  rate  of  import  duty 
(when  there  is  no  special  exception)  was,  in  1837-39,  one- 
half  Prussian  dollar,  or  15  silver  gr.,  represented  by  50  kreut- 
zfirs;  but  at  present  the  general  import  duty  of  one-half 
Prussian  dollar  is  reprosecuted  by  52i  krs. 

Attached  to  the  custom-house  tariff  will  be  found  the  va- 
rious regulations  .nder  which  the  transit  duties  are  levied  in 
the  States  of  the  Prussian  Union. 

The  legislature  of  Prussia  has  generally  made  the  transit 
of  goods  through  her  provinces  a  source  of  revenue ;  and  it 
has  not  been  wholly  unproductive,  as  a  large  portion  of  Po- 
land and  southern  Russia  import  and  export  through  the 
Prussian  ports  in  the  Baltic.  The  difficulties  which  Russian 
legislation  has  always  thrown  in  the  way  of  transit  may,  per- 
haps, have  had  some  influence  on  the  councils  of  Prussia ;  in 
fact,  the  heavy  transit-duty  imposed  on  goods  imported  through 


i 
i.l 

i 

H'  ,        „.,._i___ 

k 

192 


ECONOMIC  HISTORY. 


the  ports  of  the  Baltic  could  hardly  be  maintained  were  the 
Prussian  transit-system  a  wise  and  liberal  one.  The  South- 
ern States  of  the  union  have,  for  the  most  part,  endeavored 
to  secure  through  their  territories  a  cheap  transit  for  com- 
modities intended  for  other  countries.  The  general  princi- 
ples of  the  transit  law  are,  that, — 

1.  All  articles  admitted  without  duty  shall  transit  without 
duty  through  the  Zollverein. 

2.  Al'  articles  upon  which  the  export  and  import  duties, 
separate  or  together,  do  not  amount  to  i  dol.  or  52^  kr.  per 
cwt.,  are  to  pay  the  amount  of  the  said  duties. 

3.  All  articles  upon  which  the  export  and  import  duties 
exceed  ^  dol.,  or  52i  kr.  per  cwt.,  shall  pay  on  transit  i  dol. 
per  cwt. 

But  there  are  many  exceptions.  The  exceptional  transit 
duties  levied  by  the  tariffs  of  the  Zollverein  are :  On  cotton 
and  other  goods,  coming  or  going  through  Baltic  ports,  4  dol. 
(12«.)  per  cwt. ;  through  other  roads,  2  dol.  (6«.)  per  cwt.;  on 
cotton  twist  and  dyed  woollen  yarn,  2  dol. ;  on  copper,  coffee, 
etc.,  1  dol.  per  cwt. ;  on  raw  sugar,  20«.  gr.  (2«.). 

But  goods  going  from  the  Oder  mouth  on  the  left  bank  of 
the  Oder,  westward,  towards  the  Rhine,  and  through  the 
frontier  between  Neu-Benin,  in  Silesia,  to  Thorn,  in  Bavaria; 
or,  entering  the  right  bank  of  the  Rhine  again,  to  traverse 
the  Rhine  for  export,  cottons,  woollens,  and  many  other 
articles,  1  dol.  (3«.)  per  cwt. 

Goods  conveyed  by  the  left  bank,  or  on  the  Rhine,  or  on 
the  Moselle,  and  over  the  southern  frontier  between  Hamburg 
and  Freilassing,  or  over  the  northern  frontier  between  the 
Rhine  and  the  Elbe,  10  sq.  (1«.)  per  cwt. 

Goods  conveyed  over  the  southern  frontier,  or  from  the 
Rhine  to  the  Danube,  4^  sq.  (5ic^.)  per  cwt. 

The  details  will  be  found  in  the  Appendix  (III.  Pari.  Doc 
p.  95)  attached  to  the  Tariff. 

The  transit  system  of  the  Zollverein  is  somewhat  compli- 
cated, and  inconsistent  with  the  general  and  simple  character 
of  the  legislation.  The  tables  in  the  Appendix  (V.  Pari.  Doe. 
pp.  99-112)  will  exhibit  the  amount  of  goods  passing  through 


r 


THE  ZOLLVEREIN. 


198 


the  various  provinces  of  the  League.  One  general  transit 
(lutv,  of  low  amount,  would  certainly  be  very  favorable  to  the 
carrying  trade  of  the  union ;  nor  are  the  reasons  quite  ob- 
vious why,  la  the  recognition  of  a  principle  of  equality,  the 
couveyance  of  goods  through  certain  States  of  the  union 
should  be  loaded  with  much  heavier  fiscal  charges  than 
throuf^h  others.  It  would  seem  more  accordant  with  sound 
principles  to  encourage  transit  through  the  districts  which 
t'eographically  present  the  greatest  facilities,  rather  than  to 
give  advantages,  by  lower  duties,  to  districts  less  conveniently 
situated. 

Perhaps  the  wisest  course,  in  the  common  interest  of  the 
Zollverein,  would  be  to  completely  disassociate  all  fiscal  con- 
siderations from  the  question  of  transit,  and  to  levy  no  other 
duty  than  is  necesti^ry  for  paying  the  expenses  of  collection 
and  control.  The  prohibitory  tariffs  of  Ru'^.sia,  Poland,  and 
Austria,  certainly  require  no  new  charge  or  impediment  to  be 
added  by  a  heavy  transit  duty  to  the  cost  of  the  articles  im- 
ported through  the  States  of  the  League.  And,  even  with  the 
high  rate  of  duty  levied  (or  perhaps  rather  on  account  of  the 
high  rate  of  duty  levied),  tlie  pecuniary  interest  to  preserve 
the  present  system  is  small,  —  far  too  small  to  counterbalance 
tlie  disadvantages  and  detriments  which  the  system  creates. 

Another  obvious  inconvenience  and  loss  accrues  to  the  Zoll- 
verein from  the  motives  which  the  lower  transit  dues  of 
France,  Holland,  and  Belgium  create  for  transporting  goods 
through  the  ports  of  those  countries  instead  of  the  ports  of 
Germany ;  added  to  which,  a  habit  of  forwarding  articles  by 
a  particular  line  creates  new  interests  and  motives,  which 
make  it  difficult  to  revert  to  a  former  state  of  things.  When 
business  has  been  forced  out  of  its  natural  channel  into  a 
novel  course  it  does  not  promptly  resume  its  old  direction, 
and  the  ground  lost  is  often  not  again  to  be  won. 

Tlie  lowest  transit  duty  levied  in  the  Zollverein,  with  the 
exception  of  the  road  from  Mayence  to  the  southern  frontier, 
is  4J  silver  gr.  (,5ii.)  per  cwt. ;  but  on  the  main  roads  of 
Austria  transit  is  free  from  charge,  while  in  France  the  charge 
IS  less  tlian  half  the  amount  of  the  minimum  Prussian  duty. 

13 


'i  1 

1', 

1'; 
1 

194 


ECONOMIC  HISTORY. 


At  the  same  time,  the  advantages  which  the  railroads  of 
Belgium  o£fer,  and  the  free  navigation  of  the  principal  rivers 
of  Germany,  as  established  by  the  Vienna  Congress,  would 
all  seem  to  co-operate  in  showing  how  much  it  is  for  the  in- 
terest of  the  League  to  facilitate  tramit  by  every  possible 
means.i  The  attention  which  has  been  of  late  years  so  suc- 
cessfully given  in  Germany  to  the  improvement  of  the  roads, 
and  all  other  means  of  communication,  cannot  receive  a 
greater  recompense  than  by  encouragement  given  to  the  tran- 
sit trade  by  a  low  rate  of  duty  levied.  The  profits  deposited 
by  the  transport  of  merchandise,  are,  from  their  diffusion,  apt 
to  escape  attention  ;  but  perhaps  there  are  none  which  give  a 
greater  activity  to  agricultural  industry,  nor  which  are  more 
intimately  connected  with  the  public  prosperity  and  the  ■gen- 
eral progress  of  improvement  and  civilization. 

There  is  considerable  difficulty  in  estimating  the  amount 
of  the  imports  from  Great  Britain  into  the  States  of  the  Zoli- 
verein,  as  they  penetrate  through  so  many  channels,  — not 
only  through  German  ports,  but  from  the  ports  of  Holland 
and  Belgium  and  the  Hanse  Towns.  From  Hamburg  and 
the  Elbe  especially  a  large  part  of  the  wants  of  the  Verein 
are  supplied ;  there  are  also  large  importations  through  Rot- 
terdam and  the  Rhine,  as  well  as  through  Bremen  and  the 
Weser.  But,  by  a  comparison  of  the  returns  of  our  imports 
from  and  exports  to  the  various  circumjacent  countries, 
which  have  been  prepared  with  his  accustomed  accuracy  and 
diligence  by  Mr.  Young  (Appendix  VI.  to  IX.  Pari.  Doc. 
pp.  113-139),  with  the  very  detailed  statements  given  me  by 
the  Prussian  government,  all  of  which  documents  will  be 
found  in  the  Appendix  (XI.  to  XVII.,  Pari.  Doc.  pp.  143- 
226),  an  approximate  estimate  of  the  general  amount,  and 
of  the  special  details  of  our  commercial  intercourse  will  be 
obtained. 

Though  the  strong  and  irresistible  tendency  of  an  organ- 
ization like  that  of  the  Commercial  League  is  to  blend  the 
separate  interests  of  its  component  parts  into  the  common 


1  Osiander,  pp.  116-117. 


THE  ZOLLVEREIN. 


195 


paramount  interests  of  the  whole,  and  to  give  to  the 
Union,  as  a  body,  an  influence  sufficiently  powerful  to  pre- 
dominate over  the  local  and  partial  influences  of  the  various 
elements  of  which  that  Union  is  composed,  still  much  time 
and  much  judicious  legislation  will  be  required,  in  order  that 
the  Union  may  fairly  represent  the  various  interests  which 
are  compreliended  in  its  action.  Happily  the  greater  interests 
are  and  must  long  continue  intimately  connected  with  tlie 
foreign  trade  of  Germany,  —  for  though  the  manufacturing 
tendencies  of  a  portion  of  the  States  of  the  Union,  associated 
as  such  tendencies  are  with  a  restless  activity,  —  a  spirit  of 
association,  a  unity  of  purpose,  a  combined  action,  which  give 
tlicm  more  than  their  fair  and  full  importance  in  the  struggle 
for  what  is  called  *'  protective  legislation,"  yet  it  cannot  be 
denied  tliat  there  is  in  Germany  such  a  general  diffusion  of 
intelligence  as  will  check  the  sinister  interests  in  their  de- 
mand i'or  prohibitory  duties  on  foreign  manufacture.  And  at 
the  present  moment  the  agricultural  interests,  taking  in  the 
whole  of  the  confederated  States,  represent  a  vastly  greater 
amount  of  capital  and  labor  than  the  manufacturing.  The 
agricultural  interest  exists  everywhere  and  in  many  extensive 
provinces  of  the  Union  without  any  counterbalancing  manu- 
facturing interest,  while  the  manufacturing  interest  is  to  a 
great  extent  of  modern  growth,  and  confined  to  a  limited 
portion  of  the  field  of  production.  And  even  that  manufac- 
turing interest  can  only  safely  rest  upon  a  system  of  moderate 
duties ;  for  as  soon  as  it  is  able  to  supply  the  markets  of  Ger- 
many, it  must,  for  its  surplus  produce  be  thrown  into  compe- 
tition with  the  manufacturers  of  other  lands,  and  can  only 
compete  successfully  by  cheap  production,  to  which  a  protec- 
tive and  prohibitory  system  is  in  its  very  nature  opposed  ;  for 
its  object  and  its  essence  are  to  promise  and  to  secure  high 
prices  to  the  home  manufacturer.  And  if  the  interest  of 
Prussia  for  example  be  considered,  —  Prussia,  whose  poputa- 
lation  comprises  two  thirds  of  the  whole  population  of  the 
Commercial  Union,  —  it  is  certain  that  not  only  are  her  true 
interests  hostile  to  any  system  which  prohibits  the  introduc- 
tion of  foreign  manufactures,  her  capital  engaged  in  manufac- 


'K 

T^ 

^j!   i     : 

196 


ECONOMIC  HISTORY. 


tures  being  inconsiderable  ;  but  the  general  conviction  of  the 
heads  of  departments  in  Prussia  is  opposed  to  a  protecting 
legislation. 

Tije  financial  necessities  of  Prussia  have  frequently  been 
put  forward  as  the  reason  for  the  high  rate  of  duties  estab- 
lished by  the  tariff  of  the  ZuUvcrcin ;  *  but  it  is  clear  that 
many  of  the  rates  are  far  too  high  to  be  productive ;  some  of 
them  are  wholly  prohibitory ;  and  the  revenue  would  certainly 
be  benefited  by  a  considerable  reduction.  The  ZoUverein, 
however,  has  never  been  regarded  by  the  contracting  States 
with  a  view  solely  to  the  financial  question ;  its  social  and 
political  consequences  would  reconcile  many  of  its  members 
oven  to  considerable  pecuniary  sacrifices.  .  .  . 


LE  ZOLLVEREIN. 


1    ; 


1'^ 


(Rexume  Stalistique.) 
From  Legoyt's  La  France  et  l'^trangeRi^  Vol.  I.  pp.  2.50-5. 

LE  ZOLLVEREIN  (des  deux  mots  alleniand.s  ZoW, 
douane,  et  Verein,  association)  est  le .  noin  donnd  i^ 
I'association  douanicre  qui  existe  aujourd'hui  entro  tons  les 
membres  de  la  Conf^ddration  germanique,  moins  rAiitriche, 
les  trois  villes  Ansdatiques  (Breme,  Hambourg,  et  Liibeck), 
le  Mecklembourg,  les  duchds  de  Holstein  et  du  Lauonbouig, 
et  la  principautd  de  Lichtenstein.  La  Prusse  y  figure  raenie 
pour  ses  provinces  placdes  en  dehors  de  la  Conf<id(5ration. 

Le  principe  do  cette  association  se  trouve  dans  I'articlc  19  du 
traitd  qui  a  fondd  la  Confdddration  germanique  et  qui  est  aiiisi 
con^u :  "  Ses  moml)ros  se  rdservent,  h  la  premiere  reunion  de 
leurs  pldnipotentiaires  h  Francfort,  de  ddliberer  sur  un  piojet 

1  Ogiander. 

»  Paris:  Veuve  Berger-Levrault  et  flU,  1805. 


LE  ZOLhVEREIN. 


107 


de  douanes  et  de  navigation  pour  toute  rAUemagne.**  Mais 
die  trouvait  surtout  sa  raison  d*Stre  dans  Torganisation  terri- 
toriale  ct  politique  de  rAUemagne,  compos^e  de  quaraute  Etats 
presqiie  tons  enclaves  les  uns  dans  les  autres,  ayant  chacun 
ses  barriiires  fiscales  et  son  tarif.  On  a  comtd  que,  pour  par- 
venir  dc  la  frontidre  au  centre  du  pays,  soit  du  nord  au  sud, 
soit  dc  rouest  ^  Test,  sur  un  espace  de  370  ^  445  kilometres. 
Its  marchandises  n*avaient  pas  moins  de  seize  lignes  de  dou- 
anes ii  traverser,  non  compris  les  lignes  intdrieures  appar- 
tcnant  ^  I'Etat,  aux  communes  et  meme  aux  particuliers ! 
De  lii,  dcs  frais  et  des  pertcs  de  temps  dnormes,  qui,  en  les 
grcvant  outre  mcsure,  arrStaient  ^  la  fois  la  production  et 
la  consoiumation. 

La  Priisse,  dent  les  provinces  orientates  dtaient  sdpardes  du 
rcstc  dc  la  monarchie  par  le  Hanovre,  le  Brunswick,  et  la 
He9se-Ca8sel,etqui  soufiFrait  le  plus,  peut-Stre,  de  ce  morcelle- 
mcnt  de  son  territoire,  prit  Tinitiative  des  ndgociations  qui 
dcvaieut  couduire  au  ZoUverein  actuel.  Ses  ouvertures  furent 
d'abord  accueillies  par  le  Schwarzbourg-Sondershausen,  Tuno 
de  ses  cuclaves ;  puis,  de  1819  ^  1828,  Tassociation  naissante 
vit  succcssivemcnt  venir  ^  elle  les  principautds  ou  duchds  de 
Hesse-Darmstadt,  Schwarzbourg-Rudolstadt,  Saxe-Weimar, 
Anhalt-Bernbourg,  Anhalt-Dessau,  et  Anhalt-Coethen,  soit 
pour  la  totality,  soit  pour  une  partie  de  leur  territoire.  Uu 
certain  nombre  d'Etats  du  second  ordre,  ayant  h,  leur  tete  la 
Baviere  et  le  Wiirtemberg,  tentdrcnt  d'enrayer  ce  mouvement 
dans  Icqucl  ils  voyaieut  un  agrandissement  indirect  de  I'influ- 
ence  politique  de  la  Prusse;  mais,  convaincus  de  Tinutilitd 
de  leurs  efforts  pour  constituer  une  ligne  douauiere  de  quelqne 
importance,  ils  se  rdunirent  au  ZoUverein,  le  23  mars  1833. 
La  8a\e  suivit  leur  exemple,  le  30  mars  de  la  mSme  annde, 
et  cntrama  h,  sa  suite  les  Etats  de  la  Thuringe,  la  branche 
Ernestine  de  Saxe,  Schwarzbourg  et  Reuss.  Apres  de  longues 
hesitations,  Bade  se  ddclara  pour  le  ZoUverein  le  12  mai  1835; 
Nassau,  le  10  ddcembre  1835;  Francfort-sur-le-Mein,  le  25 
Janvier  1836;  la  principautd  de  Lippe-Detmold,  le  18  octobre; 
le  Brunswick,  le  19  octobre ;  la  Hesse-!^lectorale  et  le  comt^ 
de  Schaumbourg,  le  13  novembre ;  le  comtd  de  Waldeck,  le  11 


1 


T 


198 


ECONOMIC  HISTORY. 


% 


I 

i 

i, 

1'. 

1 1  j.i  ■ 

d^cembrc  1841 ;  le  duch^  de  Luxembourg,  le  8  f^vrier  1842; 
enfin,  le  1*'  Janvier  1854,  les  deruiers  Etats  resits  fiddles  k 
I'association  du  Steuervereiny  c'est-^ire  le  Hanovro  ct  le 
duch^  d*01denbourg. 

D'aprds  Ic  reoensement  de  d^ccmbre  1861,  la  population  de 
ohaque  Etat  assooid  s'dlevait  aux  nombres  ci-aprda :  — 


Pruue .  .  . 
Luxembourg 
Bavierv  .  . 
Saxe  royale . 
Thuringe 
Hanovre  .    • 


18^867,061 
1»7,781 
4,695.424 
2,226,244 
1,069,821 
1,008,631 


WUrtemberg . 
Bade  .  .  . 
Hesse-Cauel  . 
Hesae-D  arm- 
stadt  .  .  . 
Brunswick 


1,720,708 

1,366,782 

710,680 

874,281 
267,624 


Oldenbourg  .  238,662 
Nassau  .  .  454,326 
Francfort     .        84,606 


Total 


84,670,277 


Ges  34.6  millions  d'habitants  occupent  une  superficie  de 
502,260  kilometres  carrds. 

Le  ZoUverein  n'est  pas  restd  commercialement  isold.  D^s 
sa  formation,  il  s'est  efforcd  d'agrandir  ses  d^bouclids  par  des 
traitds  avec  les  principaux  Etats  de  I'aneien  et  du  nouveau 
luonde. 

Ces  traitds  de  commerce  se  sout  succddd  dans  Tordre  ci- 
apres :  avec  la  HoUande,  les  21  Janvier  1839  et  31  ddccmbre 
1851 ;  avec  la  Porte,  le  19/22  octobre  1840 ;  avec  I'Angle- 
terre,  les  2  mars  1841  et  11  novembre  1857 ;  avec  la  Beigique, 
Ics  1"  septembre  1844,  2  Janvier  1851,  et  18  fdvrier  1852; 
avec  la  Sardaigne,  les  23  juin  1845,20  mai  1851,  et  28  octobre 
1859 ;  avec  I'Autriche,  le  19  fdvrier  1853  (d'abord  avec  la 
Prusse  seulcment,  puis  avec  le  ZoUverein,  et  plus  tard,  avec 
les  duch^s  de  Parme  et  de  Mod^ne) ;  avec  le  Mexique,  le  30 
juillet  1855 ;  avec  Brgme,  le  26  Janvier  1856 ;  avec  la  Sicile, 
le  10  aoat  1856 ;  avec  le  Danemark,  le  14  mars  1857 ;  avec 
TAutriche  et  la  principautd  de  Lichtenstein  (convention  mon^ 
taire),  le  24  Janvier  1857;  avec  la  Perse,  le  25  juin  1857; 
avec  la  confederation  Argentine,  le  19  septembre  1857. 

L'influence  de  ces  traitds  sur  le  commerce  du  ZoUverein  est 
clairement  indiqude  par  le  tableau  suivant,  qui  en  fait  con- 
nattre,  de  1834  k  1860,  la  valeur  moyenne  annuelle  absolue 
et  par  t^te  d'habitant.  Pour  la  pdriode  1834-1846,  cette  va- 
leur  a  4t4  calcuUe  par  M.  O.  Hiibner  (Jahrbuch  pour  1860  et 


■sH 


LE  ZOLLVEREIN. 


109 


1861'),  d'aprds  dcs  prix  inirariables ;  pour  les  autres  ann^es, 
d'apres  les  prix  r^eU.     Les  sommes  sont  en  millions  de 

fraucs. 


PModMtttnolM. 


1834-1838 . 
183H-1843 . 
b44-184tt . 
185i)-1852 . 
1853.  .  . 
1851.    .    . 

1855.  .  . 

1856.  .  . 
1867.  .  . 
1858.  .  . 


477.0 

677.2 

818.4 

704.6 

764.6 

1,009.1 

1,184.2 

1,312.0 

1,827.6 

1,206.6 


691.0 

662.6 

666.1 

670.6 

042.7 

1,2629 

1,157.2 

1.106.6 

1,324.1 

1.316.6 


210.0 
207.4 
260.6 
814.6 
806.6 
467.6 
620.2 
660.0 
641.6 
419.2 


1,068.0 
1,330.0 
1,4686 
1,876.1 
1,707.8 
2,262.0 
2,841.4 
2.608.4 
2,051.6 
2,621.1 


24.6 
26.7 
20.0 
30.2 
32.6 
32.6 
32.7 
38.0 
a3.2 
88.6 


I 


48.4 
60.2 
60.6 
46.6 
62.6 
69.2 
71.6 
76.0 
70.9 
76.2 


D'apres  cc  tableau,  rhistoire  commercialc  du  Zollverein  a 
eu  trois  phases  trds-distinctes.  La  premiere  coniprend  la 
p^riodc  1834-1846 ;  c*cst  peut-^tre  la  plus  brillante.  La 
scconde  embrasse  les  ann^es  de  arise  1847  h  1852.  La  troi- 
siumc,  comincnc^c  eu  1853,  se  continue  en  ce  moment ;  1857 
en  est  le  point  culminant.  Vient  cnsuite  une  reaction  assez 
sensible,  qui,  quoique  perdant  chaque  jour  de  son  intensity, 
n'a  pas  encore  fait  place  h,  une  recrudescence  bien  caractdr- 
isde.  —  Les  deux  colonnes,  importations  et  exportations,  in- 
diqueat  la  correlation  intime  qui  existe  toujours  et  partout 
entre  ces  deux  ^l^ments  du  commerce.  Inf^ricures  pendant 
assez  longtenips  aux  premieres,  les  secondes  ne  tardent  pas  k 
les  ^galer  et  memo  ^  les  d^passer  dans  certaiues  anndes.  C'est 
la  preuve  du  rapide  d^veloppement  manufacturicr  de  I'associa- 
tion.  Par  suite  de  I'cxtension  graduelle  de  son  r^scau  de 
voies  fcrrdes,  de  I'am^lioration  de  ses  voies  navigables  et  de 
la  r<iductiou  des  droits  de  transit  (aujourd'hui  supprim^s), 
son  territoire  est,  en  outre,  emprunt^  par  une  valeur  (calcul^e) 

■  On  salt  que  les  droits  de  douane  du  Zollverein  sont  ctablis  au  poids.    Lea 
publications  officielles  ne  font  done  paa  connaitre  la  vdeur  du  commerce  de 

I'associatiun. 


1  ''T'^™^ 


:•()'■ 


200 


ECONOMIC  HISTORY. 


„ 


sans  cesse  croissante  de  marchandisos.  Ne  perdons  pas  dc 
vue  toutcfuia  quo  la  valeur,  surtout  la  valour  actuelle,  ne 
saurait  donnor,  particulidroment  dans  cos  dcrnidrcH  ann^cs 
oik  les  prix  unt  6t6  robjet  d'uno  hausso  si  souduino  ct  si 
rapide,  la  mcsure  exacto  du  mouvomcnt  dcs  dehangcs  ct  dii 
transit  du  Zullvercin.  L'indication  des  quuntitds  scrait  un 
document  plus  precis ;  mais  olio  oxigorait  dos  ddveluppcmonts 
qui  no  sauraicnt  trouver  placo  ici. 


DitraMAnoM  dm  AmoiM. 

iMrOITATIOm. 

K«PORTATIO!W, 

1834. 

1844. 

ISSV. 

1834. 

44.2 

1844. 

IMt. 

88.0 

61.6 

78.4 

40.6 

100.9 

Toileadefll 

34.1 

8.6 

10.9 

88.1 

57.0 

656 

Soieriea  pures 

12.4 

14.6 

3.3.0 

27.4 

40.1 

86.1 

Soieries  indlangdes 

2.6 

8.2 

7.1 

7.9 

186 

18.0 

Lainages 

4.0 

18.1 

22.6 

67.1 

«<»0 

168.6 

Fourrurea  et  pelleteriea     .    .    . 

0.2 

0.1 

0.4 

0.4 

0.7 

i.y 

Habita  d'enfanta 

0.1 

0.3 

0.2 

0.7 

1.5 

1.9 

Ob,  eta  en  fer 

2.2 

6.2 

10.0 

12.7 

13.0 

18.0 

Ob^jeta  en  cuivre  et  laiton     .    . 
Objeta  en  plomb 

0.7 

2.2 

30 

3.4 

8.C 

6.7 

0.04 

0.04 

0.03 

— 

— 

0.4 

Ob  eta  en  zinc 

Ob  eta  en  ^tain 

_ 

_- 

0.1 

004 

0.1 

6.0 

0.1 

0.1 

0.1 

01 

01 

0,4 

Qu  ncaillerie 

1.9 

8.7 

1.4 

18.4 

45.4 

62.5 

Ubjeta   en   pierre,   marbre,  et 

autrea  mindraux 

0.4 

0.4 

0.08 

0.8 

1.1 

0.U 

Vaiaaelle  et  porcelaine  .... 

1.6 

1.5 

0.1 

8.7 

7.5 

20.2 

Verre  et  verrcrie 

2.6 

6.6 

7.1 

e.o 

3.7 

180 

Objeta  en  boia 

1.1 

2.6 

4.6 

7.9 

9.4 

22.1) 

Objeta  en  cuir 

0.7 

1.6 

8.0 

3.7 

1.9 

7.1 

Broaaerie  et  boiaaellerie    .    .    . 

0.1 

— 

0.04 

0.04 

0.1 

02 

Objeta  en  paille,  en  e'corce,  etc. 

0.4 

0.7 

1.0 

0.04 

0.1 

0.3 

Papiera,  jeux  de  cartea,  papier 
de  tenture,  cartona    .... 

0.4 

0.4 

1.1 

4.6 

1.5 

7.6 

Produita  chimiquea 

1.9 

2.6 

6.0 

3.4 

4.9 

16.9 

Poudre  h  tirer 

_- 

— 

— 

0.1 

01 

0.4 

Sarona    

0.1 

0.2 

0.1 

0.1 

0.04 

0.2 

Bougiea  et  chandellea  .... 

0.1 

0.1 

0.1 

0.1 

01 

1,0 

Farines  et  produita  farineux  .    . 

0.1 

0.1 

4.9 

1.6 

1.1 

ia.b 

Sucre  rafflne 

0.3 

0.2 

0.1 

1.1 

l.ft 

71 

Eau-de-vie 

0.8 

30.4 

22 

1.1 

1.9 

•M 

Tabac     

1.5 
4.9 
0.4 

13.1 
7.1 
0.4 

9.0 
8.6 
1.1 

6.2 
4.6 
1.6 

66 
6.0 
6.7 

18," 

Livrea 

16.!i 

Inatrumenta 

5,7 

Yoleurtotale 

164.0 

184.6 

228.9 

316.2 

365.4 

698,9 

Le  tableau  pr^cddent  fait  connattre  la  valeur  des  produits 
fabriqu^s  que  le  ZoUverein  a  import^s  et  export^s  en  1834, 


moiivcnic'i 
ne  ne  son 


LE  ZOLLVEREIS. 


SOI 


1844,  ct  1857.  II  n*a  d'autro  but  que  d'indiquor  coux  dc  ces 
itroduits  qui  sont  le  plus  habituellomcut  con8umin<$8  ou  fab- 
riquds  (iuiis  Ics  Etats  do  I'Union,  Ics  quantitds  ayant  dfi  ndccs- 
guiremeiit  a'olover  uvec  lo  chifTro  de  la  populatiun.  Cepondant 
il  founiit  CO  ronaoiguomont  important  ct  inddpcndant  du 
mouvoiuent  ilu  la  pupulation,  que,  tandis  que  Icm  iiuportutions 
ne  se  8t)nt  accrues,  de  1884  &  1857,  quo  do  36  p.  100,  lo» 
exportation^  out  plus  quo  doubld.  C'cst,  commo  nous  le 
(iisons  plus  Imut,  Ic  signo  certain  dcs  progr^s  rcmarquablcs 
dc  {'Industrie  mauufucturiOre  dans  rassociatiun. 

La  signature  ruccnto  d'un  traitd  do  commerce  et  de  naviga- 
tion cutrc  la  France  ct  la  Prusse,  traitd  en  ce  moment  soumis 
I  I'cxanicn  dcs  autres  fitats  de  Tassociation,  donne  un  intdret 
particulicr  au  tableau  ci-aprds,  rclatif  i\  nos  relations  com- 
inerciales  avec  le  Zollvcreln.  II  a  dt<5  drcssd  d'apriis  les  docu- 
ments frani^ais,  ct  indique  Ics  valours  actuelles  (en  millions 
de  francs).    II  so  rapporte  au  commerce  special. 


Importa- 

Bxporte- 

Importa. 

Exporta- 

Add«m. 

tloni  •■> 

tloni  da 

Anii<M. 

tlons  en 

Itonii  de 

rrance. 

rnnce. 

VninM. 

rnuie*. 

1847 

52.7 

46.2 

186.3  .... 

60.9 

49.0 

1848 

2:1.0 

29.6 

1864   ...    . 

75.7 

64.6 

Ml 

:w.3 

88.0 

1866   ...    . 

108.1 

65.6 

\U 

m:2 

44.7 

1866  .... 

110.3 

89.7 

1851 

38.1 

44.1 

1867    ...    . 

120.7 

117.7 

1852 

48.8 

42.8 

1868  ...    . 

1068 

147.7 

Les  importations  du  Zollverein  en  France  portent  princi- 
palement  sur  dcs  matidres  premieres  de  I'industrie  (laines, 
bestiaux,  liouille,  coke,  bois,  peaux  brutes,  poils).  Les  soie- 
ries  et  Ics  lainages  y  figurent  cepondant  pour  un  chiffre  assez 

Les  exportations  de  la  France  pour  le  Zollverein  ont,  au 
coutraire,  pour  objets  principaux  des  produits  fabriquds, 
comme  les  soieries,  les  lainages,  les  vetements  et  lingeries, 
1«3  cotonnades  imprimdes,  les  peaux  ouvrdes,  les  fils  de  laine, 
les  outils  et  instruments,  etc.  La  France  expddie  en  outre 
dans  le  Zollverein,  quand  la  rdcolte  est  bonne,  des  quantitds 
assez  cousiddrables  de  vins  ordinaires. 


<!     .)"   r" 


m 


ECONOMIC  HISTORY. 


SMI  fallait  juger,  d'aprds  le  mouvement  de  la  navigation 
dans  les  ports  prussiens,  de  rimportancc  relative  du  com- 
merce du  ZoUverein  avee  les  divers  Etats  europdcns,  c'est 
avec  I'Angleterre  qu'il  entretiendrait  le  mouvement  d'affaires 
le  plus  considerable.  Viendraient  ensuite,  par  ordrc  d^crois- 
sant  de  trafic,  les  trois  royaumes  scandinaves,  la  Hollande, 
les  portes  ans^atiques,  la  France,  la  Russie,  etc.  Mais  il  ne 
faut  pas  perdre  de  vue  qu'en  ce  qui  concerne  la  France,  la 
plus  grande  partie  de  son  commerce  avec  le  ZoUverein  se 
fait  par  la  voie  de  terre. 

Les  reccttes  des  douanes  du  ZoUverein  ont  oscilld  ainsi 
qu'il  suit  de  1834  k  1859  (nombres  en  millions  de  francs). 


Ann^. 

Importa- 
tioo. 

Exporta- 
tion. 

Timnait 

Ann^. 

Importa- 
Uon. 

Exporta- 
tion. 

TlUiiL 

1834    .    . 

52.1 

1.5 

1.9 

1847    .     . 

100.9 

3.0 

1.5 

1886    .    . 

50.6 

1.9 

1.9 

1848    .    . 

85.5 

1.5 

1.1 

1836    .    . 

65.6 

1.9 

1.9 

1849   .    . 

88.9 

1.5 

1.9 

1837    .     . 

63.7 

1.5 

2.2 

1860    .    . 

86.2 

1.1 

1.9 

1838    .    . 

72.4 

1.9 

1.9 

1861    .    . 

87.0 

1.1 

1.5 

1839    .    . 

73.9 

1.9 

2.6 

1862    .    . 

91.1 

1.1 

1.0 

1840    .    . 

76.9 

1.9 

2.6 

1863    .    . 

82.6 

1.1 

1.9 

1841    .     . 

80.2 

1.5 

2.2 

1864    .    . 

86.2 

0,7 

1.5 

1842    .    . 

85.5 

1.5 

2.2 

1865    .    . 

97.5 

0.7 

2.2 

1843    .    . 

02.6 

1.5 

2.2 

1866    .    . 

98.6 

0.7 

1.0 

1844    .    . 

96.0 

1.9 

2.6 

1857    .    . 

99.0 

0.7 

1.5 

1845    .     . 

101.6 

1.5 

1.5 

1868    .     . 

106.1 

0.7 

1.0 

1846    .    . 

99.5 

1.9 

1.1 

1869    .    . 

88.1 

0.7 

1.5 

Les  faiblcs  oscillations  du  produit  des  douanes  dopuis  1814 
constituent  le  trait  saillant  de  ce  tableau.  Toutefois,  cet  tot 
h  peu  pres  stationnaire  des  recettes  ne  saurait  etre  interpr^t^, 
en  presence  des  documents  qui  precedent,  comme  le  signe 
d'un  mouvement  d'affaires  peu  progressif.  11  ne  faut  pas 
perdre  de  vue,  d'ailleurs,  que  les  plus  grand  nombrc  des  nia- 
tieres  premieres  ont  4t4,  en  1851  et  depuis,  ou  completcment 
affranchics  ou  consid^rablement  d^grevds.  Les  droits  w 
transit  ont  ^galement  ^t^  I'objet  d'importantes  reductious 
jusqu'au  moment  de  leur  suppression  en  1861.  .  .  • 

En  1858  et  1859,  les  recettes  k  I'importation  (seulement), 
ramendes  h  100,000,  se  sont  rdparties  ainsi  qu'il  suit  cntrc  h 
Etats  qui  precedent  (Francfort-sur-le-Mein  non  compris);- 


LE  ZOLLVEREIN. 


203 


5rt»-   TtuJii. 

m. 

}.0       1.5 

1.5       1.1 

1.6       1.9 

l.l 

1.9 

l.l 

1.5 

1.1 

1.5 

1.1 

1.9 

1.5 

0.7       2.'i 

|0.7       1.5 

0.7       15 

lo.7       15 

lLJL 

Ipuia  1811 

Is,cet<!tat 

lnterpr(!t^, 

1;  Ic  S^P-^ 

1  faut  pas 

Ic  des  ma- 

Bpletcment 

Idroits  lie 

l-t-ductioQS 

Bulement) 

Reutrclf' 

K 

ris):- 

Pru»8e  

Baviere     .    .    •    • 
Hanovre    .... 

SH.xe 

Wurtemberg  .    .    . 

Bade 

Tliurinite  .... 
Hesse  ((Jrand-ducM) 
Hesse  I  Ek'Cturale)  . 
Oldenbourg   .    .    . 

Nassau 

Brunswick     .    .    . 
Luxembourg .    .    ■ 

Totoux   .    .    . 


18S8. 


60,920 

13,188 

10,062 

5,194 

4,843 

3,808 

2,976 

2,460 

2,058 

1,208 

1,242 

713 

649 


1859. 


64,021 

13,022 

10,321 

6,980 

4,769 

4,759 

2,941 

2,431 

1,972 

1,310 

1,228 

704 

642 


100,000 


Voici  quelle  a  ^t^  la  repartition  de  la  recette  nette  entre 
les  divers  Etats,  de  1857  k  1859  (valeurs  en  millions  de 

francs) :  — 


1867. 

1868. 

1868. 

Pom 
100. 

Prusse  

45,330,221 

11,635,260 

9,156,903 

6,282,801 

4,273,166 

3,359,430 

2,657.085 

2,147,683 

1,815,843 

1,1.54,006 

1,096,126 

717,188 

633,926 

484,833 

49,468,492 

12,689,373 

9,704,026 

6,762,655 

4,667,726 

3,070,278 

2,898,435 

2,370,881 

1,983,858 

1,223,058 

1,197,142 

781,402 

691,882 

629,696 

39,776,546 

10,055,831 

7,969,578 

4,677,101 

3,679,368 

2,902,875 

2,300,415 

1,877,872 

1,522,761 

1,011,798 

948,247 

667,983 

548,051 

418,218 

50.77 

iiaviere     .    . 
Hanovre   .    . 

12.84 
10.18 

Saxe    .    .    . 
Wurtemberg . 
Bade    .    .    . 

6.97 
4.70 
3  71 

f.tats  de  Tliuringe  .    . 
Hesse  (Graiid-diiche) . 
Hesse  (Electorale)  .    . 
'Udenbourg   .... 
Nassau 

2.94 
2.40 
1.94 
1.29 
1  21 

Francfort-sur-le-Mein 
Brunswick     .... 
Lujembourg .... 

0.86 
0.70 
0.50 

Totaux   .... 

89,744,369 

97,938,902 

78,366,634 

100.00 

La  colonne  des  rapports  centdsimaux  des  deux  tableaux 
qui  precedent,  appelle  tout  particulidrement  I'attontion  en 
inJiquant  les  Etats  qui  gagnent  ou  perdent  h  I'association. 
Ainsi,  par  e.\emple,  la  Prusse,  qui  encaisse  58.82  p.  100  des 
recettes  totales,  ne  figure  que  pour  60.77  dans  la  repartition, 


m:     r 


\t' 


m 


204 


ECONOMIC  HISTORY. 


tandis  que,  pour  la  Bavidre,  ces  rapports  sent  respectivement 
de  5.15  k  la  recette  et  de  12.84  ^  la  repartition.  En  r<^sum^, 
les  Etats  gagnants  sent  les  suivants :  Bavidre,  Hanovrc,  Wiir- 
tembcrg,  les  deux  Hesses,  la  Thuringe,  Oldenbourg,  ct  Nassau. 
La  Prusse,  le  Luxembourg,  la  Saxe,  Bade,  Brunswick,  et 
Francfort-sur-le-Mein  composeut  la  a^vie  des  perdants.  Les 
parts  du  ZoUvereiu  sunt  ceux  de  la  Prusse,  du  duch<;  d'Oldcn- 
bourg  et  du  Hauovre.  Les  documents  qui  suivcnt  indiqueut 
le  mouvement  de  la  navigation  de  ces  ports  de  1856  h  1859 
(grand  et  petit  cabotage  non  compris). 

PORTS  PRUSSIENS. 


Batinihts. 

T0N1IUIJX.< 

BXtimbnts 

SUB  LIST.' 

TONNIACX. 

AimfiM. 

Entrte. 

9,116 

8,922 
8633 
7,582 

Sortia. 

9,197 
9,032 
8,441 
7,684 

Entr^i. 

Sortia. 

Bntrte. 

Sortia. 

Eatres. 

Sortij. 

1869     ..    . 
1868      ..    . 
1867      ... 
1866      ..    . 

1,471,622 
1,401,560 
1,684.622 
1,337,746 

1.414,602 
1,469,682 
1,664;384 
1,874,416 

2,668 
2,699 
8,062 
1,994 

1,743 
1,939 
1,22!) 
2,111 

462,846 
433,781* 
561,130 
381, 8u0 

319.458 
401,614 
254,432 
38u^ 

Dans  le  duchd  d'Oldenbourg,  la  navigation  a  6t6  en  1859; 

k  I'entr^e,  de  933  navires  charges,  jaugeant  78,484  lasts  et 

de  11  sur  lest,  jaugeant  879  lasts ;  k  la  sortie,  de  311  navires 

charges,  jaugeant  38,295  lasts  et  de  502  sur  lest  avec  37,821 

lasts. 

PORTS  HANOVRIENS. 


Navims  CaAsefis. 

NATIRES  bob  U9T. 

Nombre. 

Uata. 

Nombre. 

L>it» 

lORO           i  Entree  .    . 
"^®    •    •   j  Sortie 

iftRB            jEntrde   .    . 
1^    •        i  Sortie     .    . 

1,141 
1,092 

3,016 
1,194 

86,850    ' 
29,270 

112.931 
86,450 

782 
899 

59") 
2,470 

21,004 
32,964 

21,858 
100,281 

Les  avantages  purement  matdriels  du  ZoUverein  pour  les 
i^tats  int^ressdes  peuvent  se  r^sumer  ainsi  qu'il  suit:  1°k- 

1  Le  tonneaa  de  mer  prustien  =  068^.80. 
*  Compris  dans  les  totaux  pr^c^dents.  . 


LE  ZOLLVEREIN. 


205 


duction  dcs  frais  de  perception  et  d'administration,  par  suite 
(le  la  suppression  dcs  rayons  de  douanes  entre  les  £tats  asso- 
ci^s;  -°  lapide  d^veloppement  industriel,  par  suite  de  I'ap- 
plication  d'un  tarif  mod^rd ;  3°  Elevation  du  chiffre  primitif 
des  recettcs  de  douane,  par  suite  de  raccroissemeut  de  con- 
soramation  rosultant  de  Tapplication  de  ce  tarif;  4"»  conclu- 
sion de  traites  de  commerce  avantageux  avcc  I'dtranger,  plus 
dispose  a  faire  des  concessions  h  un  'iXvX  qui  lui  offre  un  d^- 
bouche  coiisiddrable  qu'^  des  pays  sans  importance ;  5°  usage 
gratuit  ou  a  des  conditions  tres  mod^rdes  des  grandes  voies 
de  communication,  terrestres,  fluviales,  ou  maritimes,  qui  n'ex- 
istaient  auparavant  qu'au  profit  d'un  ou  de  quelqucs-uns  d'entre 
eux;  6°  rapide  essor  de  certaines  industries  indigenes,  aux- 
quelles  la  libre  ouverture  d'un  marchd  int<5rieur  de  33  mil- 
lions (I'habitauts,^  ainsi  que  I'usage  en  franchise  de  matidres 
premieres  fournies  par  I'un  ou  I'autre  des  fitats  associds  et 
auliefois  frappdes  de  droits  de  douane,  permettent  de  pro- 
duire  plus  deonomiquement ;  7**  creation  d'uue  forte  marine 
marchande. 

L'iiistitution  du  Zollverein  a  eu  des  avantages  correspond- 
ants  pour  le  commerce  Stranger.  Au  lieu  d'avoir  k  traverser 
40  liiTues  douanieres,  defendues  par  des  droits  plus  ou  moins 
compliquds,  plus  ou  moins  dlevds,  et  appliques  par  des  ad- 
ministrations plus  ou  moins  tracassifires,  il  s'est  trouvd  en 
face  dun  pays  unique,  recevant  ses  produits  k  des  conditions 
rclativomcnt  moderdes.  Au  lieu  d'avoir  h.  traiter  avec  des 
consommateurs  pen  aisds,  rcstreignant  leurs  depenses  au  plus 
strict  ndcessaire,  il  a  profits  du  ddvcloppement  de  la  richesse 
piil)li(iue  dans  le  Zollverein  devenu,  apres  quelques  anndes, 
«n  grand  pays,  non-seulcment  par  le  terrltoire  et  la  popula- 
tion, mais  encore  par  le  bicn-etre  croissant  de  sa  population. 

Le  ZoUvoroin  n'cst  copendant  pas,  dans  son  organisation 
et  ses  resultats  actucls,  la  formule  la  plus  complete,  la  plus 
lipurc .  ,c  du  principe  de  I'association  comraerciale.  Le  mode 
cumpliqud  de  ses  deliberations  ;2  la  difficult^,  pour  ses  membres, 

'  D'apreg  le  ddnombrement  de  1861  dont  les  resultats  ofBciels  nous  nrriTent 
en  ce  moment,  de  34,705,65)4  habitants 
'  Od  tait  que  toutes  les  deliberations  du  Zollverein,  pour  £tre  valables. 


m 


206 


ECONOMIC  HISTORY. 


d'arriver,  sur  les  questions  les  plus  graves,  k  une  solution  favo 
rable  aux  intdrets  souvent  trds  opposes  qu'ils  rep resen tent - 
les  influences  politiques  qui  s'agitent  dans  son  sein  ct  rem- 
pSchent  de  discerner  toujours  clairement  la  voie  k  suivre 
pour  tirer  de  I'union  les  rdsultats  ^conomiques  les  plus  con- 
siderables, telles  sont  les  justes  critiques  dont  il  a  souvent 
4t6  I'objet.  On  peut  encore  lui  reprocher  de  maintenir, 
malgr^  I'exemple  de  I'Angleterre  et  de  la  France,  des  droits 
qui,  pour  certains  produits  fabriquds,  d^passent  tres-sensible- 
ment,  par  le  fait  de  la  diminution  considerable,  depuis  la 
formation  du  ZoUverein,  du  prix  des  produits  grev^s,  cette 
moyenne  de  10  p.  100  de  la  valeur,  destin^e,  d'apres  le  pro- 
gramme de  Tassociation  h  son  d^but,  k  devenir  la  base  -J'>  m 
tarif.  Cette  protection  exag^r^e  est  une  double  faute,  d'abord 
parce  que  les  consommateurs  de  I'association,  moins  aisds  que 
ceux  des  deux  pays  que  nous  venons  de  citer,  sont  moins  en 
etat  de  payer  des  prix  eiev^s ;  puis,  parce  que  le  ZoUverein, 
par  les  perfcctionnements  introduits  dans  ses  proc<>d^8  de 
fabrication  et  le  bas  prix  de  la  main-d'oeuvre,  est  aujourd'hui 
tout  k  fait  en  mesure  de  lutter  efiicacement  contre  la  con- 
currence etrangere.    1862. 

doivent  €tre  prises  ii  I'unanimit^.     Ainsi,  dans  ces  d^ib^rations,  la  PnuK 
ne  pise  pas  d'un  plus  grand  poids  que  Francfort-sur-le-Mein  avec  seii 
habitants !  ... 


i  I  I 


THE  CORN  LAWS. 


207 


IX. 


THE  CORN  LAWS,  1801-1849. 
From  Levi's  History  of  British  Commerce,^  2d  Ed. 


PART  III.  — CHAP.  7. 

THE  corn  laws  had  long  been  a  bone  of  contention  in 
England.  Maintained  for  the  interest  of  a  class  who 
clung  to  them  as  their  anchor  of  safety,  they  had  always  been 
attacked  as  an  obstacle  to  the  well-being  of  the  middle  and 
lower  classes.  In  the  opinion  of  their  advocates,  protection 
was  necessary  in  order  to  keep  certain  poor  lands  in  cultiva- 
tion, and  to  encourage  the  cultivation  of  as  much  land  as 
possible  in  order  to  provide  for  the  wants  of  the  country. 
Let  the  cultivation  of  such  lands  cease,  they  said,  and  we 
shall  be  dependent  on  foreigners  for  a  large  portion  of  the 
people's  food.  Such  dependence,  moreover,  may  be  fraught 
with  immense  danger,  inasmuch  as,  in  the  event  of  war,  the 
supplies  may  be  stopped  or  our  ports  may  be  blockaded,  the 
result  of  which  may  be  famine,  disease,  or  civil  war.  Ac- 
cording to  the  defenders  of  protection  it  was  the  advantage 
gained  by  the  corn  laws  that  enabled  landed  proprietors  and 
tlieir  tenants  to  encourage  manufactures  and  trade.  Abolish 
the  corn  laws  and  half  the  country  shopkeepers  will  be 
ruined,  mills  and  factories  will  be  stopped,  large  numbers  of 
the  working-classes  will  be  thrown  out  of  work,  disturbances 
will  ensue,  capital  will  be  withdrawn,  and  no  one  dare  ven- 
ture to  say  what  may  be  the  fatal  consequences. 

In  1801  the  price  of  wheat  reached  the  high  limit  of  165«. 
a  quarter,  and  we  may  well  imagine  what  sufferings  that 
price  entailed  among  the  people,  at  a  time  especially  when 

^  London:  John  Murray,  1 880. 


208 


ECONOMIC  HISTORY. 


trade  and  manufacture  were  so  much  paralyzed  by  the  Con- 
tinental war.  Happily,  for  two  or  three  years  afterwards,  a 
succession  of  good  harvests  changed  the  condition  of  things, 
and  in  March,  1804,  the  price  of  wheat  fell  to  49«.  %d.  per 
imperial  quarter.  But  what  was  anxiously  desired  by  the 
people  was  regarded  a  great  disaster  by  the  agricultural  in- 
terest. They  complained  that  with  the  high  cost  of  produc- 
tion, in  consequence  of  high  wages,  high  rate  of  interest, 
and  the  heavy  cost  of  implements  of  husbandry,  they  could 
not  afford  to  sell  at  such  prices.  Meetings  were  held 
throughout  the  country  to  consider  the  case  of  the  farmers. 
Mr.  Western  brought  the  state  of  agriculture  before  the 
House  of  Commons,  and  a  committee  was  appointed  on  the 
subject.  The  farmers  contended  that  at  a  time  when  all 
foreign  supplies  were  shut  out  from  our  markets,  and  when 
we  were  more  than  ever  depending  on  home  production,  it 
■was  the  bounden  duty  of  the  legislature  to  pass  laws  which 
would  encourage  the  production  of  grain  at  home,  so  that 
the  nation  might  be  as  much  as  possible  independent  as  re- 
gards the  first  necessaries  of  life.  Unfortunately  all  the 
measures  hitherto  taken  for  the  protection  of  the  farmers 
resulted  only  in  the  aggravation  of  the  sufferings  of  the 
people.  It  was  easy  by  means  of  prohibitions  and  bounties 
to  raise  the  price  of  corn  and  to  give  an  artificial  stimulus  to 
agricultural  prosperity,  but  the  people  were  not  able  to  buy 
bread  at  famine  prices,  especially  at  a  time  when  taxes  were 
30  heavy.  The  report  of  the  committee  of  the  House  of 
Commons,  presented  the  same  session  in  1804,  was  to  the 
effect  that  the  price  of  corn  from  1791  to  the  harvest  of  1803 
had  been  very  irregular,  but  that  upon  an  average  it  had  in- 
creased in  a  great  degree  in  consequence  of  the  years  of 
scarcity,  and  had  in  general  yielded  a  fair  profit  to  the 
gi'r.TOi'.  It  appeared  to  the  committee,  moreover,  that  high 
I»n;e*h7d  the  effect  of  stimulating  agricultural  industry  in 
oriiithig  luto  cultivation  large  tracts  of  waste  lands,  and 
that  t'v''*  fact  combined  with  the  abundance  of  the  two  last 
prcuactiVv.  seasons,  and  other  causes,  occasioned  such  a  de- 
pression in  the  value  of  grain  as  would  tend  to  the  discour- 


THE  CORN  LAWS. 


209 


aircment  of  agriculture,  unless  maintained  by  the  support  of 
Purliamont.  Nor  was  there  much  difficulty  in  persuading 
the  Icislature  to  give  heed  to  such  recommendations.  Very 
8oon  after  the  presentation  of  the  report  a  corn  law  was 
1)8880(1,*  which  imposed  a  duty  of  248.  Zd.  per  quarter  on 
wheat  so  long  as  the  price  of  the  home  market  should  be 
under  63«. ;  of  2«.  6(i.  so  long  as  the  price  should  be  at  or 
above  that  rate,  and  under  66». ;  and  of  M.  a  quarter  when 
the  price  should  be  above  that  rate.  It  does  not  appear, 
however,  that  the  fear  entertained  by  the  farmers  and  the 
agricultural  interest  had  been  very  substantial,  for  in  the 
same  year  the  harvest  was  deficient  in  quantity  and  inferior 
in  quality,  and  all  apprehensions  that  bread  might  become 
too  cheap  were  entirely  out  of  the  question.  A  proposal,  in- 
deed, was  made  to  encourage  the  growth  of  corn  in  Great 
Britain,  and  yet  to  diminish  the  price  thereof  for  the  benefit 
of  the  people  by  exempting  farmers  from  all  direct  taxes. 
But  such  a  plan  would  have  only  transferred  the  burden  from 
one  class  to  another.  The  time  had  not  yet  arrived  for 
acting  on  the  "laissez-faire"  principle.  Artificial  aid 
was  sought  for  on  all  sides,  and  that  always  ended  in 
disappointment. 

At  the  conclusion  of  the  French  war,  in  1815,  precisely  the 
same  state  of  matters  arose  as  in  1804.  By  the  opening  of 
the  ports,  wheat  which  hitherto  averaged  £5  10s.  a  quarter 
suddenly  fell  to  £3  os.,  and  immediately  the  farmers  raised 
a  cry  of  distress.  Again  a  committee  of  the  House  of  Com- 
mons was  appointed  to  inquire  into  the  state  of  the  law 
affecting  the  corn  trade,  and  once  more  the  legislature  was 
engaged  in  framing  a  corn  law,^  which  resulted  in  an  act 
prohibiting  the  importation  of  wheat  when  the  price  was 
under  80«.,  and  rendering  it  free  when  above  80«.  Yet 
serious  misgivings  existed  as  to  the  ultimate  effect  of  the 
restrictive  legislation  respecting  corn  in  the  minds  of  many, 
and  in  the  very  House  of  Lords,  which  traditionally  stood 
in  bold  defence  of  a  protective  policy,  protests  were  lodged, 

1  44  Geo.  ITT.  c.  109. 

a  66  Geo  III.  c.  26. 

14 


Wh 


210 


ECONOMIC  HISTORY. 


which  indicated  the  existence  of  a  more  enlightened  opinion 
on  the  real  bearings  of  the  whole  question.  Lord  Grenville 
and  his  compeers  protested  against  this  new  corn  law,  bf- 
cause  they  were  adverse  in  principle  to  all  new  restraints  in 
commerce,  deeming  it  most  advantageous  to  public  prosper- 
ity to  leave  uncontrolled  the  free  current  of  national  indus- 
try. In  their  opinion  "the  great  practical  rule  of  leaving 
all  commerce  unfettered  applied  more  peculiarly,  and  on 
still  stronger  grounds  of  justice  as  well  as  of  policy,  to  the 
corn  trade  than  to  any  other.  Irresistible,  indeed,  must  be 
that  necessity  which  could,  in  their  judgment,  authorize  the 
legislature  to  tamper  with  the  sustenance  of  the  people,  and 
to  impede  the  free  purchase  and  sale  of  that  article  on 
which  depends  the  existence  of  so  large  a  portion  of  the 
community.  They  thought  that  expectations  of  ultimate 
benefit  from  any  corn  law  were  founded  on  a  delusive  theory. 
They  could  not  persuade  themselves  that  such  a  law  would 
ever  contribute  to  produce  plenty,  cheapness,  or  steadiness 
of  price.  So  long  as  it  operated  at  all,  its  effects  must  be 
the  opposite  of  these.  Monopoly  is  the  parent  of  scarcity, 
dearness,  and  uncertainty.  To  cut  off  any  of  the  sources  of 
supply  can  only  tend  to  lessen  its  abundance.  To  close 
against  ourselves  the  cheapest  market  for  any  commodity 
must  enhance  the  price  at  which  we  purchase  it.  And  to 
confine  the  consumer  of  corn  to  the  produce  of  his  own  coun- 
try is  to  refuse  ourselves  the  benefit  of  that  provision  which 
Providence  itself  has  made  for  equalizing  to  man  the  varia- 
tions of  climate  and  of  seasons.  But  whatever  might  be  the 
future  consequences  of  that  law  at  some  distant  and  uncer- 
tain period,  they  were  convinced  that  these  hopes  must  be  pur- 
chased at  the  expense  of  a  great  and  present  evil.  To  compel 
the  consumer  to  purchase  corn  dearer  at  home  than  it  might 
be  imported  from  abroad  was  the  immediate  practical  effect 
of  the  law  just  passed.  In  this  way  alone  could  it  operate. 
Its  present  protection,  its  promised  extension  of  agriculture 
must  result  (if  at  all)  from  the  profits  which  it  created  by 
keeping  up  the  price  of  corn  to  an  artifical  level.  These  fut- 
ure benefits  were  the  consequences  expected,  though  they  con- 


I 


M 


THE  CORN  LAWS. 


211 


fidcntlv  believed  erroneously  expected,  from  giving  a  bounty 
to  the  grower  of  corn  by  a  tax  levied  on  its  consumers." 
?uch  were  the  reasons  urged  against  the  corn  law  of  1815, 
and  certainly  they  do  honor  to  those  who  recorded  them  in 
the  journal  of  the  House.  But  many  a  year  was  to  pass  erd 
the  protests  of  the  few  did  become  the  deliberate  conviction 
of  the  entire  community. 

For  twelve  years  nothing  further  occurred  on  th*^  subject 
of  the  corn  laws  except  the  emission  of  repeated  cries  of 
distress  by  the  agricultural  classes,  especially  in  the  House 
of  Lords.  The  country  was  indeed  learning  by  bitter  ex- 
perience how  direct  is  the  relation  between  dear  bread  and 
bad  trade,  and  the  time  arrived  when  the  working  of  the 
corn  law  was  to  be  laid  before  the  legislature.  "  The  corn 
laws,"  said  Mr.  Whitmore,  "have  inflicted  the  greatest  in- 
jury upon  the  general  trade  of  the  world  that  ever  perhaps 
was  produced  by  injudicious  legislation.  They  have  de- 
ranged its  course,  stagnated  its  current,  and  caused  it  to 
flow  in  new  and  far  less  beneficial  channels  than  it  formerly 
occupied."  To  the  corn  laws  he  attributed  the  great  and 
ruinous  fluctuation  of  prices,  which  is  the  inevitable  result 
of  a  system  of  restriction.  "  The  more  the  basis  from  whence 
your  supplies  are  drawn  is  widened,  the  greater  the  steadi- 
ness of  prices ;  the  more  it  is  narrowed  the  more  constant  and 
the  more  fatal  is  their  effect  on  the  fluctuations  to  which  you 
are  subject.  In  the  early  times,  when  there  was  a  difficulty 
in  the  conveyance  of  bulky  commodities  from  one  part  of  the 
country  to  another,  arising  from  want  of  roads,  when  there 
existed  a  prejudice  as  well  as  a  legal  penalty  against  what  was 
called  forestalling  and  regrating,  the  fluctuations  in  prices 
weie  immense.  And  the  same  holds  good  as  regards  other 
times  and  other  countries. "  Lord  Lauderdale  himself,  while 
entertaining  considerable  fear  of  foreign  competition,  clearly 
showed  what  are  the  solid  and  what  arc  the  fictitious  ways 
to  agricultural  prosperity.  "I  will  take  upon  myself,"  he 
said,  "to  assert  that  if  there  is  any  one  proposition  in  politi- 
cal economy  which  may  be  affirmed,  it  is  this,  that  the 
interests  of  landlords  properly  understood  are  absolutely 


rr^T 


212 


ECONOMIC  HISTORY. 


identified  with  the  general  interests  of  the  country.  Land- 
lords have  no  interest  in  high  prices ;  high  prices  raise  rintg 
nominally  and  in  appearance ;  and  now  aud  then  sumc  tem- 
porary advantage  may  be  obtained  from  them,  for  which 
landlords  will  always  pay  afterwards  with  more  than  com- 
pound interest;  but  rents  can  only  bo  raised  largely,  perma- 
nently, and  beneficially  to  landlords  by  one  of  two  causes, 
both  of  which  are  equally  conducive  to  the  prosperity  of  all 
other  classes;  first,  by  improvements  in  agriculture,  which 
leave  a  larger  surplus  produce  after  the  expenses  of  cultiva- 
tion are  defrayed;  and  secondly,  by  improved  and  extended 
markets.  Now  all  improvements  of  agriculture  wliich  in- 
crease the  surplus  produce  of  the  country  are  obviously  a 
direct  addition  to  the  public  wealth.  And  how  are  markets 
improved  and  extended  ?  By  new  communication,  —  roads, 
railways,  canals, — but  principally  by  the  continual  rise 
and  increase  of  large  towns  within  our  own  empire,  rendered 
rich  and  prosperous  by  thriving  manufactures,  and  by  all  the 
improvements  in  skill  and  machinery  connected  with  such 
establishments.  The  best  job  for  the  landlord  is  the  pros- 
perity of  trade  in  all  its  branches,  as  the  best  jolj  fur  trade 
is  a  prosperous  state  of  agriculture.  There  is  nothing  to 
make  the  inhabitant  of  the  town  and  the  cultivator  of  the 
soil  jealous  of  each  other;  quite  the  contrary,  for  the  more 
each  produces,  the  more  he  will  have  to  exchange  for  the 
other;  and  this  is  the  foundation  of  the  great  internal  trade 
which  is  worth  one  hundred  times  more  than  all  the  foreign 
commerce  of  the  country  put  together." 

Yet  notwithstanding  the  enunciation  of  these  truths  the 
farmers  clung  tenaciously  to  protection;  and  it  was  not 
without  a  great  struggle  that  they  allowed  the  corn  laws  to 
be  relaxed  to  a  small  extent.  In  the  session  of  1827  resolu- 
tions were  passed  in  the  House  of  Commons  to  the  effect 
that  corn  should  bo  allowed  to  be  imported  free  of  duty,  in 
order  to  be  warehoused,  and  that  it  should  be  admissible  for 
home  consumption  at  a  shilling  per  quarter  duty  when  the 
price  of  wheat  should  be  70«.,  and  at  two  shillings  more  for 
every  shilling  that  the  price  fell  below  70s.    per  quarter. 


THE  CORN  LAWS. 


213 


Tliesc  rosolutiona,  however,  made  no  progress  in  conse- 
quence of  the  change  of  government.  The  following  session 
the  Ilouac  of  Commons  passed  other  resolutions  to  the  effect 
of  imposing  a  sliding  scale  from  23«.  per  quarter  when  the 
price  of  wheat  should  be  648.,  and  168.  %d.  when  the  price 
shDuld  bo  098.,  to  one  shilling  per  quarter  when  the  price 
8lioul(l  bo  at  and  above  73».  per  quarter.  And  upon  these 
bases  a  new  corn  law  was  passed,*  which,  like  its  predeces- 
sors, did  not  long  remain  in  force. 

It  was  ten  years  after  the   passing  of  this  first  sliding 
scale,  or  on  March  15,  1838,  that  Mr.  Villiers,  seconded  by 
Sir  William  Molesworth,  first  commenced  his  attack  on  the 
policy  of  the  corn  laws  in  the  House  of  Commons,  though 
with  little  effect.     In  those  days  political  economists  were 
simply  allowed  to  speak   and  complain.     Their  opinions 
were  received  as  mere  speculative  theories,   their  recom- 
mendations were  deemed  as  far  beyond  the  reach  of  practical 
statesmanship.     There  was  only  one  minister  present  when 
Mr.  Villiers'  motion  was  made,  and  as  might  have  been  ex- 
pected, it  was  lost  by  an  overwhelming  majority.     But  about 
that  time  a  lecture  was  advertised  to  be  delivered  at  Bolton, 
the  bii'thplace  of  Arkwright  and  Crompton,    on  the  corn 
laws,  by  a  person  quite  a  stranger  to  the  town.     It  was  a 
new  subject  for  a  lecture,  and  as  the  public  mind  was  di- 
rected to  the  question,  the  lecture  drew  a  fair  number  of 
hearers.    The  lecturer,  however,  found  only  when  it  was  too 
late  that  it  was  not  easy  to  deal  with  economic  questions 
before  a  mixed  audience,  and  he  completely  broke  down. 
The  audience,  not  prepared  for  the  disappointment,  became 
impatient  and  vociferous,  and  a  riot  was  impending,  when  a 
youth,  a  medical  student,  rushed  to  the  platform,  and  on  the 
spur  of  the  moment  addressed  the  people  on  the  subject  in  a 
vigorous  and  manly  manner.     The  people  were  delighted  at 
this  turn,  and   Mr.  Paulton  won  for  himself  enthusiastic 
admiration.     On  the  news  of  such  an  event  travelling  to  the 
neighboring  towns,  the  volunteer  lecturer  was  overwhelmed 


»  9  Geo.  IV.  c. 


11 


214 


ECONOMIC  HISTORY, 


M  :.l 


U   !' 


with  invitations  to  rodolivor  his  address,  and  everywhere  he 
captivated  the  audience  with  his  eloquent  attacks  on  monop- 
oly and  monopolists. 

As  the  interest  in  the  question  of  the  corn  laws  grew  and 
extended,  it  became  evident  that  a  special  and  more  popular 
agency  was  wanted  for  the  purpose,  and  thus  in  October  of 
1888  eight  •  men  first  united  themselves  with  a  view  to  estab- 
lish an  Anti-Corn  Law  Association.  The  list  of  the  provi- 
sional committee  was  afterwards  increased  to  thirty -seven, 
conspicuous  among  them  being  John  Bright,  George  Wilson, 
and  Richard  Cobden.  And  the  object  of  the  associutiou  was 
declared  to  be  to  for.n  a  fund  in  order  to  diffuse  informatiun 
by  lectures  or  pamphlets  on  the  bearing  of  the  corn  laws,  to 
defray  the  expense  of  petitioning,  and  above  all  to  create  an 
organization  to  bring  numbers  together  in  such  force  and 
with  such  energy  of  purpose  as  to  secure  the  great  object, 
namely,  the  complete  freedom  of  trade  and  the  destruction 
not  only  of  the  corn  monopoly,  but  of  all  the  other  monopolies 
bolstered  up  by  this  monster  grievance.  Small  was  the  sup- 
port at  first  obtained  by  this  new  association.  Very  few  then 
appreciated  its  great  moral  importance.  "For  the  first  two 
or  three  years  of  our  agitation,"  said  Mr.  Cobden,  "it  was  a 
very  hopeless  matter,  and  there  was  no  dclat  nor  applause. 
.  .  .  We  sat  in  a  small  room,  and  we  had  a  dingy  red  curtain 
drawn  across  the  room  that  we  might  not  be  chilled  by  the 
paucity  of  our  numbers.  Two  or  three  were  all  that  were 
here  (Newall's  Buildings)  on  one  occasion,  and  I  recollect 
saying  to  my  friend  Prentice,  '  What  a  lucky  thing  it  is 
the  monopolists  cannot  draw  aside  that  curtain  and  see  how 
many  of  us  there  are,  for  if  they  could  they  would  not  be 
much  frightened.'"  It  was  not  long,  however,  ere  the 
small  association  began  to  manifest  its  power  and  influence, 
and  when,  aided  by  the  powerful  support  of  some  at  least  of 
the  leading  journals,  its  voice  resounded  through  the  length 

»  The  original  founders  of  the  League  were  John  Benjamin  Smith,  Arclii- 
bald  Prentice,  Richard  Cobden,  Thomas  Bazley,  William  Rawson,  W  K  Cal 
lender,  Henry  and  Edmund  Ashworth.  (See  "  Cobden  and  the  League,"  by 
Henry  Ashworth,  Esq.) 


THE  CORN  LAWS. 


n5 


and  Itrondth  of  tho  land.  Meetings  and  conferences  then  suc- 
ccoiKhI  each  other.  From  tho  manufacturing  districts  the 
movcMiu'ut  spread  to  the  metropolis,  and  with  a  clearly  defined 
purpose  in  view,  and  with  the  highest  economic  authorities 
to  a(i|)onI  to  in  support  of  their  principles,  tho  Anti-Corn  Law 
airitators  inude  everywhere  a  profound  and  lasting  impression. 
Oil  March  12,  1839,  Mr  Villiers  again  brought  the  subject 
of  tilt'  (Mun  laws  before  tho  House  of  Commims,  now,  how- 
ever, l)a(!kc'd  by  a  strong  party  both  inside  and  outside  the 
House,  IIi«  motion  was,  "That  this  House  resolve  itself 
into  a  committee  of  the  whole  House,  to  take  into  considera- 
tion the  act  9  George  IV.,  regulating  tho  importation  of  for- 
eiirn  grain."  Mr.  Villiers  showed  that  tho  ^orn  laws  wore 
not  biMiclicial  to  tho  agricultural  interest,  and  that  neither 
the  ajrriciiltural  laborer  nor  tho  farmer  reaped  from  them 
any  benefit.  He  asserted  that  tho  community  at  largo  suf- 
fered a  loss  through  the  corn  laws,  equal  to  a  poll  tax  of  8«. 
ahead,  or  a  tax  of  £2  on  each  family  in  the  kingdom,  and 
he  demonstrated  that  commerce  and  shipping  were  greatly 
injured  by  them.  Mr.  Villiers'  motion  was  seconded  by  Sir 
George  Strickland,  and  on  his  side  spoke  Mr.  Poulott 
Thomson,  Sir  William  Molesworth,  Mr.  Grote,  Mr.  Clay, 
Lord  Ilowick,  Sir  Henry  Parnell,  Mr.  Ward,  Lord  John 
Russell,  Mr.  Hume,  Mr.  Piclden,  and  Mr.  O'Connell ;  while 
ajrainst  him  were  Sir  James  Graham,  Sir  Robert  Peel,  and 
a  host  of  Conservatives.  Tho  discussion  was  animated  and 
well  sustained,  and  after  five  whole  nights'  debate  the  votes 
were  taken  and  the  motion  was  lost  by  195  to  342.  In  the 
House  of  Lords  too  a  discussion  was  commenced  on  the  sub- 
ject. On  March  14  the  Earl  of  Fitzwilliam  moved,  "That 
the  act  9  (icorge  IV.  c.  60,  entitled  '  An  Act  to  amend  the 
law  relating  to  the  importation  of  corn,'  has  failed  to  secure 
that  steadiness  in  the  price  of  grain  which  is  essential  to 
the  \mi  interests  of  the  country ; "  but  the  motion  was  lost 
by  24  against  224.  A  day  after  Lord  Brougham  moved, 
"That  this  House  do  immediately  resolve  itself  into  a  com- 
mittee of  the  whole  House,  to  take  into  consideration  tho 
importation  of  foreign  corn."    But  the  motion  met  a  similar 


•  r^v 


^^^ 


!!/■■     1 


216 


ECONOMIC  HISTORY. 


:aM.ii, 


fate,  only  7  having  voted  for  it,  and  61  against  it.  Slow  is 
the  progress  of  any  measure  in  the  House  of  Commons  when 
any  substantial  reform  is  contemplated,  but  slower  still  is 
its  advance  in  the  House  of  Lords.  Coming  less  in  contact 
with  the  mass  of  the  people,  comparatively  strangers  to  their 
feelings  and  wants,  conservative  by  interest  and  hereditary 
policy,  the  peers  of  the  realm  are  necessarily  the  last  to  ad- 
mit the  need  of  change,  and  the  last  to  make  concessions  to 
the  altered  exigencies  of  the  times.  Nevertheless,  there  have 
never  been  wanting  enlightened  members  in  the  Upper  House 
who  sought  the  maintenance  and  preservation  of  their  order 
from  that  same  law  of  progress  on  which  all  the  institutions 
of  the  realm  depend,  and  who,  far  from  regarding  their  in- 
terests as  antagonistic  to  those  of  other  classes  of  society,  had 
the  wisdom  to  discern  that  we  are  all  subject  to  the  same 
laws,  influenced  by  the  same  circumstances,  and  alike  bound 
to  obey  those  laws  of  nature  which,  more  than  any  human  con- 
trivance, determine  the  progress  and  prosperity  of  States. 

The  result  of  Mr.  Villiers'  motion  in  the  House  of  Com- 
mons was  not  likely  to  discourage  the  Anti-Corn  Law  Asso- 
ciation. On  the  contrary,  it  imparted  to  it  a  new  life  and 
a  fresh  impulse.  Determined  to  persevere  till  the  end,  the 
agitators  saw  in  the  strength  of  their  opponents  only  an  ad- 
ditional cause  for  more  energetic  labors.  A  meeting  was 
accordingly  organized  in  London,  and  the  same  voice  which 
first  gave  strength  and  vivacity  to  the  Manchester  gathering 
was  now  heard  exclaiming,  "  We  are  the  representatives  of 
three  millions  of  people,  — a  far  greater  number  of  constitu- 
ents than  the  House  ever  could  boast  of.  We  well  know  that 
no  great  principle  was  ever  indebted  to  Parliament  for  success; 
the  victory  must  be  gained  out  of  doors.  The  great  towns  of 
Britain  have  extended  the  right  hand  of  fellowship  to  each 
other,  and  their  alliance  will  be  a  Hanseatic  league  against 
the  feudal  corn-law  plunderers."  The  Anti-Corn  Law 
League  was  never  a  political  organization.  For  years  its 
members  went  on  lecturing,  distributing  tracts,  and  actmi! 
as  a  peripatetic  university  in  instructing  the  people  on  the 
evil  of  commercial  monopoly.     Never  did  they  allow  them- 


THE  CORN  LAWS. 


217 


selves  to  be  tempted  to  other  political  topics.  The  League 
(lid  not  even  wish  to  interfere  with  the  system  of  taxation 
further  than  extinguishing  at  once  and  forever  the  principle 
of  maintaining  taxes  for  the  benefit  of  a  particular  class.  "  If 
it  be  asked, "  said  Mr.  Cobden,  "  why  it  is  that  we,  profess- 
ing to  bo  free-traders  in  everything,  should  restrict  the 
title  of  our  association  to  that  of  the  'National  Anti-Corn 
Law  League,'  I  will  explain  the  reason.  We  advocate  the 
abolition  of  the  corn  law  because  we  believe  that  to  be  the 
foster-parent  of  all  other  monopolies ;  and  if  we  destroy  that, 
—  the  parent,  the  monster  monopoly,  —  it  will  save  us  the 
trouble  of  destroying  all  the  rest." 


PART  IV.  — CHAP.  1. 

The  day  arrived  when  the  government  of  the  country  had 
to  be  confided  to  the  great  Conservative  party  in  the  House. 
For  some  time  past  the  administration  of  Lord  Melbourne 
had  phown  unmistakable  signs  of  inherent  weakness,  and  its 
opponents,  counting  among  them  such  men  as  Sir  Robert 
Peel,  Lord  Stanley,  Mr.   Gladstone,  and  Mr.   Disraeli,  were 
decidedly  gaining  strength  and  influence.     The  Conservative 
party  has  been  charged  with  thwarting  and  opposing  the 
liberal  tendencies  of  the  nation,  and  they  certainly  resisted 
the  passing  of  the  Reform  Bill,  the  repeal  of  the  Test  and 
Corporation  Acts,  and  the  Emancipation  of  Roman  Catho- 
lics.   Yet  a  memorable  Conservative  administration  is  be- 
fore us,  which  inaugurated  an  era  of  great  prosperity,  and 
one  which,  under  the  presiding  genius  of  Sir  Robert  Peel, 
has  ever  since  been  held  in  grateful  remembrance  for  the  prac- 
tical wisdom  which  it  displayed,  and  the  bold  and  vigorous 
oommercial  and  financial  policy  it  carried  into  effect.     Sir 
Robert  Peel  had  already  gained  for  himself  a  high  reputation 
as  a  statesman.^    As  a  member  of  the  Bullion  Committee 

'  Sir  Robert  Peel's  first  ailministration  was  a  short  one.  He  formed  his 
Cabinet  on  December  0,  1834,  and  forthwith  diaaolved  Parliament.  A  new 
Parliament  was  summoned  to  meet  on  February  19, 1835,  but  an  amendment  to 
tlie  address  was  carried  in  the  House  of  Commons  on  February  26,  by  a  m»- 


ffT 


m 


m 


Vi't- 


-ft 


218 


ECONOMIC  HISTORY. 


of  1810,  as  under-secretary  for  the  colonies  during  the  most 
trying  years  of  the  Continental  War,  as  Secretary  for  Ireland, 
in  all  these  capacities  he  proved  himself  an  a  ainister 
and  an  economist  of  much  practical  wisdom ;  i  it  was  a 
good  omen  for  the  country  when,  in  September,  1841,  at  a 
time  of  much  financial  anxiety.  Sir  Robert  Peel  was  once 
more  called  to  take  the  helm  of  the  State. 

There  was  something  novel  and  encouraging  in  the  speech 
from  the  throne  which  opened  the  labors  of  the  new  admin- 
istration. "  Her  Majesty  is  anxious  that  this  object,  namely, 
the  increase  of  the  public  revenue,  should  be  effected  in  the 
manner  least  burdensome  to  her  people ;  and  it  has  appeared 
to  Her  Majesty,  after  full  deliberation,  that  you  may,  at  this 
juncture,  properly  direct  your  attention  to  the  revision  of 
duties  affecting  the  productions  of  foreign  countries.  It  will 
be  for  you  to  consider  whether  some  of  the  duties  are  not  so 
trifling  in  amount  as  to  be  unproductive  to  the  revenue,  while 
they  are  vexatious  to  commerce.  You  may  further  examine 
whether  the  principle  of  prohibition  in  which  others  of  these 
duties  are  founded,  be  not  carried  to  an  extent  injurious  alilie 
to  the  income  of  the  State  and  the  interest  of  the  people.  Her 
Majesty  is  desirous  that  you  should  consider  the  laws  which 
regulate  the  trade  in  corn.  It  will  be  for  you  to  determine 
whether  those  laws  do  not  aggravate  the  natural  fluctuation 
of  supply,  whether  they  do  not  embarrass  trade,  derange  cur- 
rency, and  by  their  operation  diminish  the  comfort  and  in- 
crease the  privations  of  the  great  body  of  the  community." 
Surely  this  was  a  programme  more  liberal  than  could  have 
been  expected  from  a  Conservative  ministry ;  but  the  temper 
of  the  people  and  the  exigencies  of  the  time  demanded  that 
and  a  great  deal  more.  Gloom  and  discontent  prevailed  ex- 
tensively throughout  the  manufacturing  districts.  The  Anti- 
Corn-Law  League  had  by  this  time  become  formidable.  The 
demand  was  loud  and  imperious  for  cheap  food,  and  the  total 
repeal  of  the  corn  laws.     And  on  the  day  fixed  for  the  an- 

jorlty  of  309  to  802.  Other  advene  divigions  immediately  thereafter  took 
place,  and  Sir  Robert  Peel  announced  hia  resignation  of  the  minittqr  on 
April  8. 


THE  CORN  LAWS. 


219 


nouncement  of  the  ministerial  measure  some  five  hundred 
deputies  from  the  Anti-Corn-Law  Associations  in  the  me- 
tropolis and  provinces  went  in  procession  to  the  House  of 
Commons,  but  were  refused  admittance.  Yet  with  all  this 
the  government  was  not  disconcerted,  and  with  imperturba- 
ble gravity  on  February  9,  1842,  Sir  Robert  Peel  exposed 
the  policy  of  the  cabinet  on  the  corn  laws. 

At  fust  Sir  Robert  Peel  did  not  attach  much  weight  to  the 
influence  of  these  laws.  In  his  speech  in  the  House  he  said 
that  to  his  mind  the  question  was  not  so  much  what  was  the 
price  of  food  as  what  was  the  command  which  the  laboring 
classes  of  the  population  had  of  all  that  constituted  the  en- 
joyments of  life.  His  belief  and  the  belief  of  his  colleagues 
was  that  it  was  important  for  the  country  to  take  care  that 
the  main  source  of  the  supply  of  corn  should  be  derived  from 
domestic  agriculture.  And  he  contended  that  a  certain 
amount  of  protection  was  absolutely  required  for  that  indus- 
try. But  he  made  a  most  important  avowal,  one  which  no 
Protectionist  ministry  had  ever  made,  that  protection  should 
not  be  retained  for  the  special  benefit  of  any  particular  class, 
but  only  for  the  advantage  of  the  nation  at  large,  and  in  so 
far  only  as  was  consistent  with  the  general  welfare  of  all 
classes  of  society.  Sir  Robert  Peel  then  entered  on  the  ex- 
tent of  such  protection,  and  having  taken  548.  to  58«.  per 
quarter  as  the  price  at  which  corn  should  range  for  a  fair 
remuneration  to  the  agriculturist,  he  asked.  Shall  the  corn 
laws  be  based  on  a  sliding  scale,  or  on  a  fixed  duty  ?  Much 
might  be  said  for  the  one  and  for  the  other.  A  sliding  scale 
was  introduced  in  France  in  1819,  one  had  been  adopted 
in  Belgium,  the  Netherlands,  and  other  countries,  and  it 
seemed  to  have  the  advantage  of  adapting  itself  to  every 
circumstance.  But  experience  did  not  confirm  the  hopes 
entertained  of  its  working.  It  did  not  hinder  prices  rising 
higher  than  was  desirable  in  years  of  scarcity ;  and  it  had  the 
same  pre jndicial 'effect  as  every  corn  law  of  causing  the  cul- 
tivation of  land  to  be  regulated,  not  by  its  inherent  capacity, 
but  by  the  amount  of  forced  stimulus  given  to  it  by  the 
Legislature.     Besides  these  radical  defects  the  objections 


vny 


220 


ECONOMIC  HISTORY. 


urged  against  the  sliding  scale  were,  that  the  reduction  of 
duty  was  so  rapid  as  to  hold  out  temptation  to  fraud ;  that 
it  operated  as  an  inducement  to  retain  corn,  or  combine  for 
the  purpose  of  influencing  the  averages ;  that  the  rapid  de- 
cline of  the  duty  was  injurious  to  the  consumer,  the  pro- 
ducer, the  revenue,  and  the  commerce  of  the  country ;  that 
it  was  injurious  to  the  consumer  because  when  corn  was  at  a 
high  price,  say  between  66».  and  70«.  and  just  when  it  would 
be  for  the  public  advantage  that  corn  should  be  liberated  for 
the  purpose  of  consumption,  the  joint  operation  of  increased 
price  and  diminished  duty  induced  the  holders  to  keep  it 
back  in  the  hope  of  realizing  the  price  of  upwards  of  70», 
and  so  paying  only  1«.  duty;  that  it  operated  injuriously  to 
the  agricultural  interest,  because  it  held  out  a  temptation  to 
keep  back  corn  until  it  could  be  suddenly  entered  for  con- 
Bumption  at  the  lowest  amount  of  duty,  when  agriculture 
lost  the  protection  which  the  law  intended  it  should  possess; 
that  it  was  injurious  to  the  revenue  because  instead  of  corn 
being  entered  for  home  consumption  when  it  arrived,  it  was 
retained  until  it  could  be  introduced  at  1«.  the  revenue  los- 
ing the  difference  between  1«.  and  the  amount  of  duty  which 
would  otherwise  have  been  levied ;  that  it  was  injurious  to 
commerce  because  when  corn  was  grown  at  a  distance,  in 
America,  for  instance,  the  grower  was  subject  to  the  disad- 
vantage that  before  his  cargo  arrived  in  this  country  the 
sudden  entries  of  wheat  at  1«.  duty  from  countries  nearer 
England  might  have  so  diminished  the  price  and  increased 
the  duty  as  to  cause  his  speculation  to  prove  not  only  a  fail- 
ure but  ruinous.  These  were  formidable  objections  to  any 
sliding  scale,  but  between  a  gradual  and  a  fixed  rate  of  duty 
there  was  not  a  material  difference.  On  the  other  hand,  a 
fixed  duty  of  8».  per  quarter  was  to'j  low  as  a  protection  in 
time  of  abundance,  and  was  in  effect  a  prohibitory  duty  in 
time  of  scarcity.  Nor  was  it  possible  to  maintain  more  than 
a  nominal  duty  when  prices  began  to  rise*  It  was  indeed 
difficult  to  strike  the  balance  of  advantage  and  inconvenience 
between  the  sliding  scale  and  the  fixed  duty.  So,  on  the 
whole,  Sir  Robert  Peel  favored  the  principle  of  the  sliding 


THE  CORN  LAWS. 


221 


scale,  that  is,  of  making  the  duty  upon  corn  vary  inversely 
with  the  price  in  the  home  market,  taking  the  average  of  the 
market  prices  from  returns  collected  by  excise  officers. 
Having,  therefore,  decided  on  charging  20«.  duty  when  the 
average  price  of  wheat  was  50».  and  51«.  per  quarter,  he 
proposed  to  make  that  duty  fall  by  a  reduction  of  1«.  a 
quarter  as  the  average  price  rose  1«.,  with  some  slight  modi- 
tications,  ao  that  the  duty  should  be  only  1«.  per  quarter 
when  the  price  of  wheat  rose  to  738.  a  quarter  and  upwards, 
and  a  bill  so  framed  he  presented  to  the  House  of  Commons. 
The  House  was  not  prepared  at  the  time  for  a  very  liberal 
measure.  Lord  John  Russell  made  a  motion  in  favor  of  a 
fixed  duty,  but  it  was  not  popular;  and  notwithstanding  a 
few  expressions  of  dissatisfaction,  the  Government  proposal 
was  well  received.  Lord  John  Russell's  amendment  was 
lost  by  226  to  349,  and  Sir  Robert  Peel's  bill  passed  into 
law.'  But  the  country  was  not  satisfied.  Meetings  con- 
timicd  to  be  held  in  the  manufacturing  districts,  and  Mr. 
Villlers,  stimulated  by  the  representations  and  efforts  of  the 
Anti-Corn-Law  League,  again  brought  forward  his  motion 
for  the  total  repeal  of  the  corn  laws,  which  was  again  lost 
by  the  enormous  majority  of  90  to  393.  The  battle  of  the 
corn  laws  had  by  this  time  become  violent  both  in  and  out  of 
Parliament,  and  Mr.  Villiers  was  not  likely  to  be  dispirited 
by  the  result  of  this  division. 

It  is  not,  however,  by  the  vain  attempt  to  render  a  corn 
law  acceptable  that  the  commercial  administration  of  Sir 
Robert  Pool  will  be  remembered.  That  was  at  best  a  tem- 
porary and  transitory  measure.  It  is  when  we  consider  his 
financial  policy  as  a  whole,  and  more  especially  the  plan 
which  he  devised  for  improving  the  state  of  the  finances 
and  imparting  new  life  to  commerce  and  industry,  that  we 
recognize  the  breadth  of  view,  the  sound  wisdom,  and  practi- 
cal knowledge  which  Sir  Robert  Peel  possessed.  For  years 
past  the  finances  of  the  country  had  fallen  into  complete  dis- 
order.   An  annual  deficiency  of  one  or  two  millions  had 


»  5  &  6  Vict.  c.  14.    [Table  omitted.] 


I      ^ 


'11 


222 


ECONOMIC  HISTORY. 


become  a  chronic  evil,  and  no  means  of  escape  presented 
itself.^  With  a  disaffected  people  and  frequent  riots  in  the 
manufacturing  districts,  with  a  paralyzed  trade  and  wages 
reduced  to  a  very  low  scale,  any  idea  of  imposing  new  taxes 
or  making  tho&c  ^  siing  heavier  was  out  of  the  question. 
A  temporary  and  casual  deficiency  might  have  been  met  by 
an  issue  of  exchequer  bills ;  but  what  would  have  been  the 
use  of  resorting  to  such  expedient  when  there  was  no 
ground  whatever  for  expecting  any  immediate  improvement? 
On  the  other  hai  j,,  ij  n^wo  recourse  to  loans  in  times  of 
peace  in  order  to  b^.u^i^  ^>^o  revenue  and  expenditure  was 
equally  inadmissible.  Sii'  ftobert  Peel  knew  that  a  timely 
and  moderfii:  redrc^ion  of  t.^  ■  is  favorable  rather  than 
injurious  to  the  r'j\eiiue  He  '  ..•^.'\*  that  though  for  the 
moment  such  a  reduction  migh^,  s)  a  loss,  nevertheless, 
by  the  stimulus  it  affords  to  increasing  consumption,  the 
revenue  would  soon  recover  itself,  and  probably  exceed  the 
amount  previously  produced.  Yet,  unfortunately,  the  few 
precedents  he  had  for  such  an  operation,  attempted  in  times 
not  very  prosperous,  were  not  encouraging.  In  1825  the 
revenue  from  wine  amounted  to  ,£2,153,000.  The  duty  was 
then  reduced  from  9«.  l^d.  to  is.  2|c?.  per  gallon;  and  what 
was  the  result  ?  The  year  after  the  revenue  was  X1,400,COO; 
it  afterwards  increased  to  £1,700,000,  but  it  fell  again  to 
jC  1,400, 000.  The  duty  on  tobacco  had  been  reduced  from 
4«.  to  3«.  per  pound.  Before  the  reduction  the  revenue  was 
jE  3, 378, 000,  immediately  after  it  fell  to  £2,600,000;  and 
though  it  rose  somewhat  from  that  point,  it  did  not  reach 
the  previous  amount.  Of  course  the  consumption  of  articles 
of  luxury,  such  as  wine  and  tobacco,  is  not  so  affected  by  a 
reduction  of  duty  as  that  of  tea,  sugar,  and  other  necessaries 
of  life.  Moreover,  the  resources  of  the  country  were  at  that 
time  comparatively  undeveloped,  to  admit  of  any  large  in- 
crease of  consumption.  Still,  such  experience  did  not  war- 
rant the  expectation  that  a  reduction  of  taxes  would  have 
the  effect  of  filling  the  exchequer. 

»  The  deficiency  in  the  year  ended  April  5,  1841,  was  £1,167,601;  in  the 
year  ended  April  6, 1842.  £117,627;  and  1848,  £2,704,610. 


THE  CORN  LAWS. 


223 


But  the  circumstances  of  trade  required  instant  relief, 
and  the  tariff  needed  a  thorough  reform  and  simplification. 
Two  years  before,  in  1840,  on  the  motion  of  Mr.  Hume,  a 
committee  of  the  House  of  Commons  was  appointed  to  in- 
quire into  the  duties  levied  on  imports,  and  to  determine 
how  far  they  were  imposed  for  purposes  of  revenue ;  and  in 
their  report  the  committee  said:  "The  tariff  of  the  United 
Kingdom  presents  neither  congruity  nor  unity  of  purpose; 
no  general  principles  seem  to  have  been  applied.  The  tariff 
often  aims  at  incompatible  ends ;  the  duties  are  sometimes 
meant  to  be  both  productive  of  revenue  and  for  protection, 
objects  which  are  frequently  inconsistent  with  each  other. 
Hence  they  sometimes  operate  to  the  complete  exclusion  of 
foreign  produce,  and  in  so  far  no  revenue  can  of  course  be 
received ;  and  sometimes  when  the  duty  is  inordinately  high 
the  amount  of  revenue  is  in  consequence  trifling.  They  do 
not  make  the  receipt  of  revenue  the  main  consideration,  but 
allow  that  primary  object  of  fiscal  regulations  to  be  thwarted 
by  the  attempt  to  protect  a  great  variety  of  particular  inter- 
ests at  the  expense  of  revenue,  and  of  the  commercial  in- 
tercourse with  other  countries.  While  the  tariff  has  been 
made  subordinate  to  many  small  producing  interests  at  home 
by  the  sacrifice  of  revenue  in  order  to  support  their  interest, 
the  same  principle  of  interference  is  largely  applied  by  the 
various  discriminating  duties  to  the  produce  of  our  colonies, 
by  which  exclusive  advantages  are  given  to  the  colonial  in- 
terests at  the  expense  of  the  mother  country. "  Such  were 
the  general  features  of  the  tariff,  the  result  of  years  of  care- 
less legislation  on  the  subject.  The  fact  was  indeed  too 
evident  that  it  was  necessary  to  prune  the  over-burdened 
tariff,  and  to  liberate  a  large  variety  of  articles  from  the 
needless  trammels  of  legislation. 

But  bow  to  accomplish  this  without  a  handsome  surplus 
revenue?  Fortunately  Sir  Robert  Peel,  undeterred  by  the 
state  of  the  revenue,  determined  to  do  what  was  neces- 
sary for  trade.  And  he  acted  wisely.  Untrammel  indus- 
try from  the  bonds  of  legal  restrictions,  open  the  avenue 
to  wealth  and  prosperity, —  that  is  the  right  policy.     Pur- 


irr 


224 


ECONOMIC  HISTORY. 


t'-c 


ii 


», 


sue  this  course  and  there  is  no  fear  but  the  revenue  will 
set  itself  speedily  right.  Some  slight  reductions  he  made 
in  1841,  but  on  March  11,  1842,  in  his  famous  financial 
statement,  he  proposed  to  reduce  considerably  all  the 
duties  on  the  raw  materials  of  manufacture,  all  duties 
on  goods  partially  or  wholly  manufactured,  as  well  as 
the  duties  on  timber,  and  all  export  duties,  together 
producing  ^£1,500, 000;  and  to  make  up  this  loss,  and  to 
provide  for  the  original  deficit  in  the  revenue,  amount- 
ing to  £2,570,000,  by  an  income  and  property  tax  of 
Id.  in  the  pound,  which  he  expected  would  produce 
j£  3, 700, 000;^  by  the  equalization  of  the  stamp  and  spirit 
duties,  which  would  give  JB 400, 000;  and  by  a  small  tax  on 
the  exportation  of  coals,  which  would  give  jE  200, 000,— mak- 
ing in  all  ^£4, 310, 000.  It  was  a  very  simple  plan;  yet 
there  was  profound  wisdom  in  Sir  Robert  Peel's  budget 
The  value  of  the  reductions  proposed  far  exceeded  the 
amount  of  relief  in  taxation  they  each  and  collectively 
afforded.  The  removal  of  the  taxes  on  raw  materials  was  a 
great  boon,  inasmuch  as  they  had  the  effect  of  putting  our 
manufactures  in  a  disadvantageous  position  in  the  markets 
of  the  world,  and  restricting  the  field  for  the  employment  of 
capital  and  labor.  As  was  said  in  the  discussion  on  the 
budget,  suppose  50,000  head  of  cattle  were  to  be  annually 
imported  in  consequence  of  such  remissions,  such  importa- 
tion would  produce  but  a  small  effect  on  the  price  of  meat, 
but  it  would  create  an  import  trade  to  the  amount  of  half  a 
million  of  money,  a  trade  which,  in  its  nature,  would  tend 
to  produce  an  export  trade  in  return  of  an  equal  amount 
Our  export  trade  is  measured  and  limited  by  our  import 
trade.  If  an  individual  merchant  cannot  afford  to  send  his 
goods  to  other  countries  without  obtaining  any  return, 
neither  can  all  merchants  collectively,  and  the  country  as  a 
■whole  afford  to  export  commodities  to  foreign  countries,  if 

I  The  amount  of  duty  asiessed,  in  1843,  was  £5,608.348.  The  amount  of 
property  assessed  was:  Schedule  A,  £95,284,497;  Schedule  B,  £46,769,915; 
Schedule  C,  £27,909,793;  Schedule  D,  £71,830,344;  Schedule  E,  £9,718,451 
Total,  £251,018,003.    [Additional  note  omitted.] 


THE  CORN  LAWS. 


225 


in  some  shape  or  other  imports  are  not  received  from  those 
lountries  in  return.  Reduce  the  duties  on  imports,  and  you 
thereby  proinote  the  export  of  our  produce  and  manufactures. 
Remove  those  taxes  which  burden  our  manufactures  and  you 
iiioraotc  tlie  importation  of  those  articles  which  are  neces- 
sary to  the  comfort  and  welfare  of  the  nation.  The  income 
tax  might  be  odious,  "  inquisitorial,  intolerable, "  yet  it  was 
at  tliat  time  the  only  means  by  which  the  necessary  reforms 
in  the  tariff  could  be  attempted.  And  the  nation,  having 
balanced  the  evil  and  the  good  of  the  proposal,  and  having 
found  that  the  advantages  preponderated,  cheerfully  accepted 
the  government  proposal,  and  gave  to  the  proposal  its  hearty 
consent. 

The  commercial  policy  thus  inaugurated  by  Sir  Robert 
Peel,  being  in  perfect  accord  with  sound  economic  princi- 
ples, could  not  fail  to  be  successful.  From  1841  to  1843,  as 
we  have  seen,  there  was  a  yearly  deficit  in  the  budget.  In 
the  year  ending  Apri'  5,  1844,  Sir  Robert  Peel  found  him- 
self in  possession  of  a  handsome  surplus  of  ,£2,600,000, 
which  was  exceeded  in  the  following  year,  and  continued  at 
a  high  point  for  four  consecutive  years.*  The  exports  of 
British  produce,  which  in  1842  had  fallen  to  £47,000,000 
increased  to  £52,000,000  in  1843;  to  £58,000,000  in  1844; 
and  £60,000,000  in  1845.  The  shipping  entered  and  cleared 
increased  from  9,000,000  tons  in  1842  to  12,000,000  tons  in 
1845.  In  every  way,  financially  and  commerciall}',  the  re- 
sults fully  realized  the  anticipations  formed,  and  Sir  Robert 
was  encouraged  to  advance  still  further  in  the  same  direc- 
tion. Nothing  important  was  attempted  in  the  budget  of 
1843,2  but  in  1844  the  duty  on  wool  was  abolished,  the 
duties  on  currants  and  coffee  were  reduced,  and  a  great 
change  was  made  on  the  duties  on  marine  insurance.  And 
then,  as  we  have  seen  in  the  previous  chapter,  the  differential 
duties  against  foreign-grown  sugar  were  relaxed  by  permit- 
ting the  importation  of  sugar,  the  growth  of  China,  Java,  or 

'  The  surplus  in  the  year  ended  April  5,  1844,  was  £2,686,126;    1846, 
i-3.027,615;  1846,  £1,647,324;  and  in  1847,  £2,823,762. 
''  [Footnoti'  on  "  Taxes  Reduced  or  Repealed,"  omitted.] 

16 


\m 


■™  "nT-l—i-WW^B 


226 


ECONOMIC  HISTORY. 


Manilla,  or  of  any  other  countries  which  Her  Majesty  In 
council  shall  have  declared  to  be  admissible  at  moderate 
rates.  In  1845  another  still  more  important  series  of  re- 
forms was  introduced.  The  duty  on  cotton  wool,  which, 
however  slight  and  inappreciable  on  the  coarser  material, 
pressed  rather  heavily  on  the  finer  muslin,  was  abolished. 
The  export  duty  on  coals,  which  had  been  found  vexatious 
and  injurious  was  removed.  The  timber  duties  were  further 
reduced.  The  duty  on  glass  was  removed  from  the  tariff, 
and  also  the  duties  on  four  hundred  and  thirty  articles, 
which  produced  little  or  no  revenue,  including  fibrous  mate- 
rials such  as  silk,  hemp,  and  flax,  furniture,  woods,  cabinet- 
makers' materials,  animal  and  vegetable  oil,  ores  and 
minerals,  etc.  In  1846  the  liberal  policy  was  further  ex- 
tended. Hitherto  our  manufacturers  had  been  benefited 
by  the  free  access  granted  to  the  raw  materials.  It 
was  right  to  ask  of  them  to  relinquish  some,  at  least,  of 
the  protecting  duties  still  in  existence.  And  the  duties 
on  linen,  woollen,  and  cotton  manufactures  were  reduced 
from  20  to  10  per  cent.  The  silk  duties  then  at  30  per 
cent  were  also  reduced  to  15  per  cent.  A  reduction  was 
made  on  the  duties  on  stained  paper,  on  manufactures  of 
metals,  earthenware,  on  carriages,  and  on  manufactures 
of  leather ;  and  the  duties  on  butter,  cheese,  and  hops  were 
further  reduced.^ 

But  was  it  right  to  effect  all  these  reforms  without  asking 
for  reciprocity  on  the  part  of  foreign  countries  ?  For  years 
past  it  was  known  that  Her  Majesty's  government  had  used 
every  effort  to  enter  into  treaties  with  several  States,  such 
as  Brazil,  Portugal,  Spain,  and  France,  with  a  view  to 
the  adoption  of  mutual  concessions.  In  1843  and  1844 
Mr.  Ricardo  brought  the  subject  before  the  House  of  Com- 
mons, and  moved  for  an  address  to  Her  Majesty,  praying 
that  Her  Majesty  be  pleased  to  give  directions  to  her  ser- 
vants not  to  enter  into  any  negotiations  with  foreign  powers 

»  In  1842  there  were  1,090  articles  and  subdivisions  of  articles  charged  with 
distinct  rales  of  import  duty  in  tlie  customs  tariff.  In  1846  tiie  numb«i  wm 
reduced  to  424. 


THE  CORN  LAWS. 


227 


which  would  make  any  contemplated  alterations  of  the  tariff 
of  the  United  Kingdom  contingent  on  the  alterations  of  the 
tariff  of  other  countries;  and  expressing  to  Her  Majesty  the 
opinion  of  the  House,  that  the  great  object  of  relieving 
the  commercial  intercourse  between  this  country  and  foreign 
nations  from  all  injurious  restrictions  would  be  best  promoted 
bv  regulating  our  own  customs  dutiei>,  as  might  be  most 
suitable  to  the  financial  and  commercial  interests  of  this 
country,  without  reference  to  the  amount  of  duties  which 
foreign  powers  might  think  it  expedient  for  their  own  in- 
terest to  levy  on  British  goods.  But  the  government  opposed 
the  motion,  and  Mr.  Ricardo  was  defeated.  Mr.  Gladstone 
especially  defended  the  policy  of  endeavoring  to  obtain  such 
treaties.  He  did  not  wish,  he  said,  "  to  be  trammelled  by 
an  abstract  proposition,  and  unless  Mr.  Ricardo  could  show 
that  there  were  no  possible  circumstances  in  which  a  com- 
mercial treaty  could  be  aught  other  than  evil,  he  had  no 
right  to  call  upon  the  House  to  affirm  his  resolution."  The 
government,  however,  now  practically  acted  on  the  policy 
advocated  by  Mr.  Ricardo,  and  Sir  Robert  Peel  avowed  it 
frankly. 

"I  have  no  guarantee,"  he  said,^  "to  give  you  that  other 
countries  will  immediately  follow  our  example.  I  give  you 
that  advantage  in  the  argument.  Wearied  with  our  long 
and  unavailing  efforts  to  enter  into  satisfactory  commercial 
treaties  with  other  nations,  we  have  resolved  at  length  to  con- 
sult our  interests,  and  not  to  punish  other  countries  for  the 
wrong  they  do  us  in  continuing  their  high  duties  upon  the 
importation  of  our  products  and  manufactures,  by  continu- 
ing high  duties  ourselves,  encouraging  unlawful  trade.  We 
have  had  no  communication  with  any  foreign  government 
upon  the  subject  of  these  reductions.  We  cannot  promise 
that  France  will  immediately  make  a  corresponding  reduction 
m  her  tariff.  I  cannot  promise  that  Russia  will  prove  her 
gratitude  to  us  for  our  reduction  of  duty  on  her  tallow  by 
any  diminution  of  her  duties.      You  may,  therefore,  say  in 


1  Hansard's  Debates,  Jan.  27, 1846. 


m 

111'  I   » 


228 


ECONOMIC  HISTORY. 


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11 

li. 

opposition  to  tho  present  plan,  'What  is  this  superfluoug 
liberality,  that  you  are  going  to  do  away  with  all  these 
duties,  and  yet  you  expect  nothing  in  return  ?  '  I  may  jwr- 
haps  bo  tuld  that  many  foreign  countries  since  tiie  former 
relaxation  of  duties  on  our  part,  —  and  that  would  bo  per- 
fectly consistent  with  tho  fact,  —  foreign  countries  which 
have  been  benefited  by  our  relaxations,  have  not  followed  our 
example ;  nay,  have  not  only  not  followed  our  example,  but 
have  actually  applied  to  tho  im[)ortation  of  British  poods 
higher  rates  of  duties  than  formerly.  I  quite  admit  it.  I 
give  you  all  the  benefit  of  that  argument.  I  rely  upon  that 
fact  as  conclusive  proof  of  the  policy  of  the  coiu'se  we  are 
pursuing.  It  is  a  fact  that  other  countries  have  not  followed 
our  example,  and  have  levied  higher  duties  in  some  cases  upon 
our  goods.  But  what  has  been  the  result  upon  the  amount 
of  your  exports  ?  You  have  defied  the  regulations  of  these 
countries.  Your  export  trade  is  greatly  increased.  Now, 
why  is  that  so  ?  Partly  because  of  your  acting  without  wish- 
ing to  avail  yourselves  of  their  assistance,  partly  because  of 
the  smuggler,  not  engaged  by  you,  in  so  many  continental 
countries,  whom  the  strict  regulations  and  the  triple  duties 
which  are  to  prevent  the  ingress  of  foreign  goods  have  raised 
up,  and  partly  perhaps  because  these  very  precautions  against 
the  ingress  of  your  commodities  are  a  burden,  and  the  taxa- 
tion increasing  the  cost  of  production  disqualify  the  forci|rnor 
from  competing  with  you.  But  your  exports,  whatever  be 
the  tariiT  of  other  countries,  or  however  apparent  the  ingrati- 
tude with  which  they  have  treated  you,  your  exjiort  trade 
has  been  constantly  increasing.  By  the  remission  of  your 
duties  upon  the  raw  material,  by  inciting  your  skill  and  in- 
dustry, by  competition  with  foreign  goods  you  have  defud 
your  competitors  in  foreign  markets,  and  you  have  been 
enabled  to  exclude  them.  Notwithstanding  their  hostile 
tariffs  the  declared  value  of  British  exports  has  increased 
above  .£10,000,000  during  the  period  which  has  elapsed  sinee 
the  relaxation  of  duties  on  your  part.  I  say,  therefore,  to 
you  that  these  hostile  tariffs,  so  far  from  being  an  objection 
to  continuing  your  policy,  are  an  argument  in  its  favor.    But, 


THE  CORN  LAWS. 


229 


(i(|>('n(l  upon  it,  your  example  will  ultimately  prevail.  When 
vdiir  cxuinple  could  bo  quoted  in  favor  of  restriction,  it  was 
(iiiotpd  larirely.  When  your  example  can  be  (pioted  in  favor 
(•f  rclaxi.  ts  conducive  to  your  interest,  it  may,  perhaps, 
excite  at  mst  in  foreign  governments,  in  foreign  boards  of 
tnule  but  little  interest  or  feeling;  but  the  sense  of  the  peo- 
iite  of  the  great  body  of  consumers  will  prevail,  and  in  spite 
of  the  desire  of  government  and  boards  of  trade  to  raise 
ri'vonuc  by  restrictive  duties,  reason  and  common  sense  will 
induce  relaxation  of  high  duties.     That  is  my  firm  belief. " 


PART  IV.  — CHAP.  4. 

The  Anti-Corn-Law  agitation  was  one  of  those  movements 
which,  being  founded  on  right  principles,  and  in  harmony 
with  the  interest  of  the  masses,  was  sure  to  gather  fresh 
strength  )-  y  event  a£fecting  the  supply  of  food.  It  was 
popular  t'  npt  to  reverse  a  policy  which  aimed  almost 

exclusively  to  benefit  one  class  of  society.  It  was  well 
known  that  the  League  wanted  to  outset  an  economic  fallacy, 
and  that  they  wished  to  relieve  the  people  from  a  great  bur- 
den. And  as  time  elapsed  and  the  soundness  of  the  princi- 
ples projioundcd  by  the  League  at  their  public  meetings  was 
more  and  more  appreciated,  their  triumph  became  certain, 
and  Her  Majesty's  government  itself  began  to  see  that  it  was 
no  longer  possible  to  treat  the  agitation  either  by  a  silent 
passivencss  or  by  expressed  contempt.  The  economic  theo- 
rists had  the  mass  of  the  people  with  them.  Their  gather- 
ings wore  becoming  more  and  more  enthusiastic.  And  even 
amidst  Conservative  landowners  there  were  not  a  few  enlight- 
ened and  liberal  minds  who  had  already,  silently  at  least, 
espoused  the  new  ideas.  No  change  certainly  could  be  ex- 
pected so  long  as  bread  was  cheap  and  labor  abundant.  But 
when  a  deficient  harvest  and  a  blight  in  the  potato-crop  crip- 
plod  the  resources  of  the  people  and  raised  grain  to  famine 
prices,  the  voice  of  the  League  acquired  greater  power  and 
influence.  Hitherto  they  had  received  hundreds  of  pounds. 
Now  thousands  were  sent  in  to  support  the  agitation.     A 


HT^ 


280 


ECONOMIC  HISTORY. 


quarter  of  a  million  was  readily  contributed.  Nor  were  the 
contributors  Lancashire  mill-owners  exclusively.  Amonc 
them  were  merchants  and  bankers,  men  of  heart  and  men  of 
mind,  the  poor  laborer  and  the  peer  of  the  realm.  The  fer- 
vid oratory  of  Bright,  the  demonstrative  and  argumentative 
reasoning  of  Cobden,  the  more  popular  appeals  of  Fox, 
Rawlins,  and  other  platform  speakers,  filled  the  newspaper 
press  and  were  eagerly  read.  And  when  Parliament  die- 
solved  in  August,  1845,  even  Sir  Robert  Peel  showed  some 
slight  symptoms  of  a  conviction  that  the  days  of  the  corn 
laws  were  numbered.  Every  day  in  truth  brought  home  to 
his  mind  a  stronger  need  for  action,  and  as  the  ravages  of 
the  potato  disease  progressed  he  saw  that  all  further  resist- 
ance would  be  absolutely  dangerous. 

A  cabinet  council  was  held  on  October  31  of  that  vear  to 
consult  as  \o  what  was  to  be  done,  and  at  an  adjourned  meet- 
ing on  November  5  Sir  Robert  Peel  intimated  his  intention 
to  issue  an  order  in  council  remitting  the  duty  on  grain  in 
bond  to  one  shilling,  and  opening  the  ports  for  the  admission 
of  all  species  of  grain  at  a  smaller  rate  of  duty  until  a  day  to 
be  named  in  the  order ;  to  call  Parliament  together  on  the 
27th  inst. ,  in  order  to  ask  for  an  indemnity  and  a  sanction  of 
the  order  by  law ;  and  to  submit  to  Parliament,  immcdiatelv 
after  the  recess,  a  modification  of  the  existing  law,  inchid- 
ing  the  admission,  at  a  nominal  duty,  of  Indian  corn  and  of 
British  colonial  corn.  A  serious  difference  of  opinion,  how- 
ever, was  found  to  exist  in  the  cabinet  on  the  question 
brought  before  them,  —  the  only  ministers  supporting  such 
measures  being  the  Earl  of  Aberdeen,  Sir  James  Graham, 
and  Mr.  Sidney  Herbert.  Nor  was  it  easy  to  induce  the 
other  members  to  listen  to  reason.  And  though,  at  a  subse- 
quent meeting  held  on  November  28,  Sir  Robert  Peel  so  far 
secured  a  majority  in  his  favor,  it  was  evident  that  the  cabi- 
net was  too  divided  to  justify  him  in  bringing  forward  his 
measures,  and  he  decided  upon  resigning  office. 

His  resolution  to  that  effect  having  been  communicated  to 
the  Queen,  Her  Majesty  summoned  Lord  John  Russell  to 
form  a  cabinet;  and  to  smooth  his  path,   Sir  Robert  Vm^ 


%' 


THE  CORN  LA  WS. 


231 


with  characteristic  frankness,  sent  a  memorandum  to  Her 
Majesty  embodying  a  promise  to  give  him  his  support.     But 
Lord  John  Russell  failed  in  his  efforts,  and  the  Queen  had 
no  alternative  but  to  recall  Sir  Robert  Peel  and  give  him 
full  power  to  carry  out  his  measures.     It  was  under  such 
circumstances  that  Parliament  was  called  for  January  22, 
1846,  and  on  January  27  the  government   plan  was  pro- 
pounded before  a  crowded  House.     It  was  not  an  immediate 
repeal  of  the  corn  laws  that  Sir  Robert  Peel  recommended. 
He  proposed  a  temporary  protection  for  three  years  till  Feb- 
rurary  1,  1849,  imposing  a  scale  during  that  time  ranging 
from  4«.  when  the  price  of  wheat  should  be  50«.  per  quarter 
and  upward,  and  10«.  when  the  price  should  be  under  48«. 
per  quarter,  and  that  after  that  period  all  grain  should  be 
admitted  at  the  uniform  duty  of  1«.  per  quarter.     The  meas- 
ure, as  might  have  been  expected,  was  received  in  a  very 
different  manner  by  the  political  parties  in  both  Houses  of 
Parliament.     There  was  treason  in  the  Conservative  camp, 
it  was  said,  and  keen  and  bitter  was  the  opposition  ottered 
to  the  chief  of  the  party.     For  twelve  nights  speaker  after 
speaker  indulged  in  personal  recriminations.     They  recalled 
to  Sir  Robert  Peel's  memory  the  speeches  he  had  made  in 
defence  of  the  corn  laws.     And  as  to  his  assertion  that  he 
had  changed  his  mind,  they  denied  his  right  to  do  so.     Mr. 
Colquhoun  "wondered  that  Sir  Robert  could  say,   '  I  have 
changed  my  opinion,  and  there  is  an  end  of  it. '     But  there 
was  not  an  end  of  it.     His  right  honorable  friend  must  not 
forget  the  laws  by  which  the  words  of  men  of  genius,  whether 
orators  or  poets,  are  bound  up  with  them.     His  right  honor- 
able friend's  words  could  not  thus  pass  aw%'iy.     They  were 
winged  shafts  that  pierced  many  minds.     They   remained 
after  the  occasion  which  produced  them  passed  away.     His 
light  honorable  friend  must  remember  that  the  words  which 
he  had  used  adhered  to  the  memory,  moulded  men's  senti- 
ments, guided  public  opinion.     He  must  recollect  that  the 
armor  of  proof  which  he  had  laid  aside,  and  the  lance  which 
he  had  wielded,  and  with  which  he  had  pierced  many  an 
encumbered  opponent,  remained  weighty  and  entire.    Greatly 


Pi. 


232 


ECONOMIC  HISTORY. 


did  he  wish  that  his  right  honorable  friend  were  again  on 
this  side  to  wield  them,  that  he  were  here  to  lead  their  ranks 
and  guide  them  by  his  prowess.  But  if  not,  they  retained  at 
least  his  arms ;  these  lay  at  their  feet,  strewed  all  around 
them,  an  arsenal  of  power."  Petulant  remonstrances  like 
these  were  of  course  of  little  avail.  Sir  Robert  Peel  and 
Mr.  Cobden  were  ready  to  meet  every  challenge,  and  to  re- 
fute every  argument  with  their  unanswerable  logic  of  facts. 
And  when  the  opposition  endeavored  to  throw  all  the  respon- 
sibility of  a  measure  of  such  a  character  on  the  prime  minis- 
ter, Mr.  Cobden  besought  them  to  turn  from  the  will  of  one 
individual  to  those  laws  economic  and  divine  which  seemed 
to  impose  the  duty  of  laying  wide  open  the  door  for  the  im- 
portation of  food.  "  Oh,  then  divest  the  future  prime  minis- 
ter of  this  country  of  that  odious  task  of  having  to  reconcile 
rival  interests;  divest  the  office,  if  ever  you  would  have  a 
sagacious  man  in  power  as  prime  minister,  divest  it  of  the  re- 
sponsibility of  having  to  find  food  for  the  people !  May  you 
never  find  a  prime  minister  again  to  undertake  that  awful 
responsibility !  That  responsibility  belongs  to  the  law  of  na- 
ture. As  Burke  said,  '  it  belongs  to  God  alone  to  regulate  the 
supply  of  the  food  of  nations. '  .  .  .  We  have  set  an  example 
to  the  world  in  all  ages ;  we  have  given  them  the  rcjircsenta- 
tive  system.  The  very  rules  and  regulations  of  this  House 
have  been  taken  as  the  model  for  every  representative  assem- 
bly throughout  the  whole  civilized  world ;  and  having  besides 
given  them  the  example  of  a  free  press,  and  civil  and  relig- 
ious freedom,  and  every  institution  that  belongs  to  freedom 
and  civilization,  we  are  now  about  giving  a  still  greater  ex- 
ample ;  we  are  going  to  set  the  example  of  making  industry 
free,  to  sot  the  example  of  giving  the  whole  world  every  ad- 
vantage of  clime  and  latitude  and  situation,  relying  ourselves 
on  the  freedom  of  our  industry.  Yes,  we  are  going  to  teach 
the  world  that  other  lesson.  Don't  think  there  is  anything 
selfish  in  this,  or  anything  at  all  discordant  with  Christian 
principles.  I  can  prove  that  we  advocate  nothing  but  what 
is  agreeable  to  the  highest  behests  of  Christianity.  To  buy 
in  the  cheapest  market  and  sell  in  the  dearest.     What  is  the 


THE  CORN  LAWS. 


233 


moanin"  of  the  maxim  ?  It  means  that  you  take  the  article 
which  you  have  in  the  greatest  abundance,  and  with  it 
obtain  from  others  that  of  which  they  have  the  most  to 
8|)are  so  giving  to  mankind  the  means  of  enjoying  the  full- 
est abundance  of  earth's  goods,  and  in  doing  so  carrying  out 
to  the  fullest  extent  the  Christian  doctrine  of  'Do  ye  to  all 
men  as  ye  would  they  should  do  unto  you. ' "  The  passing 
of  the  measure  was,  however,  more  than  certain,  and  after  a 
debate  of  twelve  nights'  duration  on  Mr.  Miles's  amendment, 
the  government  obtained  a  majority  of  97,  337  having  voted 
for  the  motion,  and  240  against  it.  And  from  that  evening 
the  corn  law  may  be  said  to  have  expired.'  Not  a  day  too 
80on  certfi  ..ly,  when  we  consider  the  straitened  resources 
of  the  country  as  regards  the  first  article  of  food,  caused  not 
only  by  the  bad  crop  of  grain,  but  by  the  serious  loss  of  the 
potato  crop,  especially  in  Ireland. 

Ireland  has  often  grievously  suffered  from  social  and 
political  wrongs,  from  absenteeism  and  repeal  cries,  from 
Protestant  and  Roman  Catholic  bigotry,  from  Orangeism 
and  Ribbon  ism,  from  threatening  notices  and  mid-day  assas- 
sinations, i)ut  seldom  has  her  cup  of  adversity  been  so  brim- 
ful as  iu  1845  and  1846,  from  the  failure  of  the  potato  crop. 
Tiiough  comparatively  of  recent  introduction,  the  first  potato 
root  having  been  imported  by  Sir  Walter  Raleigh  in  1610, 
potatoes  had  for  years  constituted  a  large  proportion  of  the 
food  of  the  people  of  Ireland.  A  considerable  acreage  of 
land  was  devoted  to  that  culture,  and  an  acre  of  potatoes 
would  food  more  than  double  the  number  of  individuals  that 
can  be  fed  from  an  acre  of  wheat.  Such  cultivation  was, 
moreover,  very  attractive  to  small  holders  of  land.  It  cost 
little  labor.  It  entailed  scarcely  any  expense,  and  little  or 
no  care  was  bestowed  on  it,  since  the  people  were  quite 
satisfied  with  the  coarsest  and  most  prolific  kind,  called 
lumpers  or  horse  potatoes.  Nor  was  it  the  food  of  the  people 
only  in  Ireland.  Pigs  and  poultry  shared  the  potatoes  with 
the  peasant's  family,  and  often  became  the  inmates  of  his 


1  9  and  10  Vict.  c.  22,  suspended  by  10  and  11  Vict.  c.  1. 


234 


ECONOMIC  HISTORY. 


cabin  also.  One  great  evil  connected  with  potato  culture  is 
that,  while  the  crop  is  precarious  and  uncertain,  it  cannot 
be  stored  up.  The  surplus  of  one  abundant  year  is  quite  un- 
fit to  use  in  the  next,  and  owing  to  its  great  bulk  it  cannot 
even  be  transported  from  place  to  place.  Moreover,  once 
used  to  a  description  of  food  so  extremely  cheap,  no  retrench- 
ment is  possible,  and  when  blight  comes  and  the  crop  is 
destroyed  the  people  seem  doomed  to  absolute  starvation, 
This,  unfortunately,  was  the  case  in  1822  and  1831.  In 
those  years  public  subscriptions  were  got  up,  king's  letters 
issued,  balls  and  bazaars  held,  and  public  money  granted. 
But  in  1845  and  1846  the  calamity  was  greater  than  any 
previously  experienced. 

The  potato  disease  first  manifested  itself  in  1845.     The 
early  crop,  dug  in  September  and  October,  which  consists  of 
one  sixth  of  the  whole,  nearly  escaped ;  but  the  whole  of  tiie 
late  crop,  the  people's  crop,  dug  in  December  and  January, 
was  tainted  before  arriving  at  maturity.    In  that  year  there 
was  a  full  average  crop  of  wheat.    Oats  and  barley  were 
abundant,  and  turnips,  carrots,  and  greens,  including  hay, 
were  sufficient.    Yet  on  the  continent  the  rye  crop  failed, 
and    the    potato    disease    appeared    in    Belgium,   Holland, 
Fj'ance,  and  the  west  of  Germany.    On  the  whole  the  supply 
of  grain  was  fair  during  the  year  1845,  and  prices  ruled  mod- 
erately high.     In  1846,  however,  the  blight  attacked  the 
potatoes  with  even  greater  fury  and  suddenness  in  the  month 
of  July,  and  it  attacked  both  the  early  crop  and  the  people's 
crop  at  the  same  time  that  the  wheat  crop  proved  under  an 
average.     Barley  and  oats  were  also  deficient,  and  the  rye 
crop  again  failed  on  the  Continent.     In  the  previous  year 
some  counties  in  Ireland  escaped  the  potato  disease,  but  this 
year  the  whole  country  suffered  alike.    The  loss  was  indeed 
very  great.     Probably  £13,000,000  was  a  low  estimate,  and 
from  4,000,000  to  5,000,000  quarters  of  grain  at  least  would 
be  required  to  replace  it.    As  might  be  expected  the  news 
of  such  a  disaster  had  a  fearful  effect  throughout  the  coun- 
try, and  the  utter  helplessness  of  many  millions  of  our 
fellow-subjects  became  a  subject  of  the  greatest  anxiety. 


THE  CORN  LAWS. 


235 


As  soon  as  the  potato  disease  appeared  in  1845,  govern- 
ment took  the  step  of  appointing  professors  Kane,  Lindley, 
and  Playfair  to  inquire  into  the  nature  of  the  disease,  and  to 
sug'^est  means  for  preserving  the  stock,  but  this  was  of  little 
avail.     Urged  by  necessity,  the  government  even  stepped 
out  of  its  province  and  sent  orders  to  the  United  States  for 
the  purchase  of  .£100,000  worth  of  Indian  corn,  established 
depots  in  different  parts,   and  formed  relief    committees. 
But  this  was  nothing  compared  with  what  became  necessary 
to  be  done  in  1846.     Public  works  were  then  commenced  on 
a  large  scale,  giving  employment  to  some  five  hundred  thou- 
sand persons.     The  poor  law  was  put  in  action  with  unparal- 
leled vigor,  so  that  in  July,  1847,  as  many  as  three  millions 
of  persons  were  actually  receiving  separate  rations.     A  loan 
of  X  8, 000, 000  was  contracted  by  the  government,  expressly 
to  supply  such  wants,  and  every  step  was  taken  by  two  suc- 
cossivo  administrations  —  Sir  Robert  Peel's  and  Lord  John 
Russcirs  —  to  alleviate  the  sufferings  of  the  people.     Nor 
was  private  benevolence  lacking.     The  Society  of  Friends, 
always  ready  in  acts  of  charity  and  love,  was  foremost  in  the 
good  work.       A  British  Association  was  formed  for  the 
relief  of  Ireland,  including  Jones  Loyd  (Lord  Overstone), 
Thomas  Baring,  and  Baron  Rothschild.     A  Queen's  letter 
was  issued.     A  day  of  general  fast  and  humiliation  was  held, 
and  subscriptions  were  received  from  almost  every  quarter 
of  the  world.     The  Queen's  letter  alone  produced  £171,533. 
The  British  Association  collected  ..i 263, 000;  the  Society  of 
Friends,  £43,000;  and  £168,000  more  were  intrusted  to  the 
Dublin  Society  of  Friends.      The   Sultan  of  Turkey  sent 
jei,00O.    The  Queen  gave  £2,000  and  £500  more  to  the 
British  Ladies'  clothing  fund.     Prince  Albert  gave  £500. 
The  National  Club  collected  £17,930.     America  sent  two 
ships  of  war,  the  "Jamestown"  and  "Macedonian"  full  of 
provisions;  and  the  Irish  residents  in  the  United  States  sent 
upwards  of  £200,000  to  their  relatives  to  allow  them  to  emi- 
grate.   But  with  all  this,  the  people  passed  through  a  most 
eventful  catastrophe.     One  third  of  the  people  at  least  was 
reduced  to  destitution.     A  large  number  died  by  fever  and 


I  i: 


X" 


236 


ECONOMIC  HISTORY. 


pestilence.  Such  as  could  raise  the  requisite  funds  emi- 
grated to  America.  Crowds  of  emaciated  and  famished 
people  flocked  by  every  available  means  to  English  ports. 
The  rest  were  kept  alive  by  employment  on  public  works,  by 
private  local  charity,  by  local  subscriptions,  by  contribu- 
tions from  all  parts  of  the  world,  and  by  the  most  extensive 
system  of  gratuitous  distribution  of  food  which  history 
affords  any  record  of. 

The  price  of  wheat  and  other  grain  did  not  rise  much  at 
first.     Indeed  for  a  lengthened  time  but  faint  conception  was 
entertained  of  any  want  of  foreign  grain.     The  potato  failure 
was  comparatively  a  new  thing,  and  few  imagined  that  it 
would  act  powerfully  on  the  consumption  of  grain.     In  1845 
the  average  price  of  wheat  was  no  more  than  SOs.  lie?,  per 
imperial  quarter,  it  having  risen  from  a  minimum  of  458. 
3(7.  in  March  to  SSs  lOd.  in  November;  while  the  average 
price  of  barley  was  31«.  8d.  and  of  oats  228.  6c?.     In  1846, 
also  the  average  price  of  wheat  was  54«.  Sd.,  the  price  having 
ruled  first  55».  6d.,  falling  to  46«.  Sd.  in  August,  and  rising 
to  60«.  7c?.  in  November,  while  the  average  price  of  barley 
was  32«.  8d.  and  of  oats  23  i  8c?.     But  in  1847  a  sudden  great 
rise  took  place.     The  price  of  wheat  rose  from  an  average  of 
69s.  lid.  in  January  to  an  average  of  92*.  10c?.  in  June ;  the 
price  of  barley  was  50«.  2d.  in  January,  63s.  5c?.  in  Febru- 
ary, and  52s.  lie?,  in  May  and  June ;  and  oats,  commencing 
at  298.  6c?.  in  January,  rose  to  348.  2c?.  in  June.     In  July, 
however,  a  sudden  change  took  place  by  the  concurrent  ac- 
tion of  large  importations  and  excellent  prospects  of  the 
approaching  harvest.     From  June  to  December  wheat  fell 
from  928.  10c?.  to  528.  3c?. ;  barley  from  628.  lie?,  to  30«. 
9c?. ;  and   oats  from   348.    2c?.    to   2l8.    10c?.    per  imperial 
quarter.     The  importation  of  grain  had  never  been  so  large 
as  in  this  year.     In  former  years  1,000,000  or  2,000,000 
quarters    was    the    maximum,    but    in    1846    the    imports 
amounted  to  4,752,174  quarters  of  grain  and  meal,  and  in 
1847  to  as  much  as  11,912,864  quarters,  the  greatest  in- 
crease having  taken  place  from  Russia  and  America.    Then, 
indeed,  the  nation  realized  that  the  corn  law  could  not  be 


THE  CORN  LA  WS. 


237 


maintained  any  longer.  Our  dependence  on  foreign  grain 
became  very  great,  and  thankful  indeed  wo  were  that  by  the 
wisdom  and  foresight  of  our  legislators,  the  last  corn  law  and 
the  navigation  law  were  alike  suspended,  and  our  ports  were 
opened  to  the  supply  of  food  from  any  quarter  of  the  globe. 

Another  important  consequence  of  the  potato  disease  was 
an  enormous  stimulus  to  emigration.  Great  is  the  change  in 
the  state  of  public  opinion  and  law  as  respects  emigration. 
In  olden,  yet  not  very  remote  times,  an  absolute  prohibition 
existed  against  the  departure  of  artisans  from  this  country, 
and  we  would  have  regarded  as  a  dire  misfortune  the  depart- 
ure of  hundreds  and  thousands  of  families  from  our  shores 
in  quest  of  happier  homes  and  more  fruitful  sources  of  indus- 
try. Now  we  see  whole  fleets  of  emigrant  ships  carrying 
away  many  of  the  ablest  and  most  industrious  of  our  work- 
ing population,  without  a  murmur  of  complaint  or  a  feeling 
of  sorrow.  And  why  ?  because  we  feel  that  they  only  obey 
the  law  of  nature,  which  is  always  foreseeing  and  beneficent. 
Even  savages  are  impelled  by  their  economical  condition  to 
be  always  moving  in  quest  of  food ;  and  when  civilization 
created  new  wants,  a  still  greater  impulse  was  given  to 
migrations  from  place  to  place.  Soruetimes  religious  and 
political  dissensions  have  been  the  causes  of  great  emigra- 
tion. But  motion  is  a  law  of  human  society,  and  endless 
processions  are  always  moving,  now  from  south  to  north, 
and  anon  from  north  to  south ;  at  one  time  from  west  to  east, 
and  at  another  from  cast  to  west.  As  for  this  country  the 
constant  alternation  of  times  of  prosperity  and  distress  in 
commerce  and  manufactures  renders  it  the  more  necessary 
for  our  working  people  to  have  other  outlets  for  their  indus- 
tries than  are  afforded  within  these  circumscribed  islands, 
and  it  is  fortunate  that  the  colonies  are  ever  open  for  the 
employment  of  any  number  of  laborers.  As  early  as  1826 
and  1827  the  subject  of  emigration  engaged  the  attention  of 
the  House  of  Commons,  and  their  recommendation  was  that 
the  emigrants  should  be  settled  upon  land  granted  by  the 
^tate,  and  that  whatever  fund  be  advanced  for  their  benefit 
should  be  subject  to  repayment.     In  1831  a  royal  commis- 


T^ 


\  > 


,.       M 


238 


ECONOMIC  HISTORY. 


sion  inquired  into  the  subject,  and  while  it  did  not  approve 
of  any  direct  grant  of  money  for  emigration  to  Canada  and 
other  North  American  colonies,  it  recommended  that  as  re- 
spects New  South  Wales  and  Van  Diemen's  Land  the  pro- 
ceeds of  public  land  sold  should  be  devoted  as  loans  of  ^£20 
and  upwards  towards  the  passage  money  of  families  of  me- 
chanics and  agricultural  laborers,  and  as  bounties  of,  and 
towards  the  conveyance  of,  young  unmarried  females.  This 
recommendation  was  subsequently  adopted  and  carried  out 
by  the  colonial  office,  and  then  a  loan  for  the  Australiau 
emigrants  was  converted  into  a  free  gift  and  increased  to 
j£80,  the  bounty  to  single  females  being  also  increased  to 
£20.  But  notwithstanding  these  encouragements,  the  emi- 
gration from  the  United  Kingdom  continued  very  limited  for 
a  long  time.  For  sixteen  years,  from  1815  to  1830,  the 
average  number  of  emigrants  was  only  23,000  per  annum, 
most  of  whom  went  to  the  North  American  colonies  and  the 
United  States  of  .■- merica.  From  1831  to  1840  the  average 
number  of  emigrants  increased  to  70,000  per  annum,  Aus- 
tralia then  commencing  to  attract  great  attention ;  and  from 
1841  to  1846  the  average  still  further  increased  to  100,000. 
But  in  1847  and  subsequent  years  the  stream  of  emigration 
flowed  in  a  most  rapid  manner.  Ireland  sent  forth  the 
greater  part  of  her  laboring  population,  and  in  the  decennium 
from  1847  to  1856  the  number  of  emigrants  actually  in- 
creased to  280,000  per  annum.  It  was  a  pitiful  sight  to  see 
those  crowds  of  worn-out  Irish  embarking  in  rags  and  penni- 
less for  a  foreign  shore.  But  they  went  away  from  a  place 
of  sorrow  and  suffering  to  a  country  which  seemed  to  open 
a  boundless  field  for  the  exercise  of  honest  industry.  Nor 
was  the  benefit  of  emigration  limited  to  the  emigrants  them- 
selves. The  advantage  was  quite  as  great  to  the  mother 
country.  Here  they  added  nothing  to  national  wealth. 
They  constituted  the  mortified  part  of  the  social  system 
which  needed  amputation.  There,  not  only  they  ceased  to 
trench  upon  the  labor  of  others,  but,  after  providing  food 
for  themselves  they  became  large  customers  for  our  produce 
and  manufactures. 


THE  CORN  LA  WS. 


289 


Ere  we  pass  from  the  repeal  of  the  corn  law  and  its  conse- 
quences, reference  must  be  made  to  an  achievement  certainly 
not  less  important  in  relation  to  the  economic  policy  of  the 
country,  the  repeal  of  the  navigation  law.     In  1845  these 
laws  were  consolidated,  and  it  seemed  as  if  they  were  to 
continue  for  many  a  year  in  existence,  but  the  necessity  for 
suspending  their  operation  in  1846  and  1847,  and  the  pro- 
gress of  public  opinion  in  matters  of  free  trade  suggested 
an  inquiry  into  the  operation  and  policy  of  such  laws  in 
1847.    Of  that  committee  Mr.  Milner  Gibson  was  chairman, 
and  during  the  year  they  published   five   reports   on  the 
subject  containing  valuable  evidence,  tending  to  show  the  ob- 
jections to  such  laws  and  the  injury  which  they  caused,  not- 
witlistanding  their  restricted  operation, —  a  large  portion  of 
the  trade  being  no  longer  protected  by  them.     Evidence  was 
given  to  the  effect  that,  looking  to  the  geographical  position 
of  this  country,  nT.a  to  the  peculiar  energy  of  her  people,  the 
extent  of  her  trade,  her  great  capital,  and  her  success  in 
maritime  enterprise,  there  need  be  no  limit  to  the  prosperity 
of  her  shipping  were  it  not  for  the  restrictions  and  unneces- 
sary charges  imposed  on  it  by  the  Navigation  Act,  the  Regis- 
try Act,  and  several  other  acts.     It  was  urged  that  if  we 
could  reduce  the  cost  of  ships  and  consequently  of  freights, 
we  should  increase  trade  to  an  enormous  extent ;  that  the 
immense  traffic  which  railways  occasioned  in  this  country 
was  the  strongest  proof  that  cheap  conveyance  on  the  sea 
would  be  attended  with  similar  results,  and  that  we  should 
not  only  obtain  a  much  larger  quantity  of  goods  than  have 
iiitherto  come  to  market,  but  that  we  should  find  new  ex- 
changeable commodities  which  did  not  then  come  here ;  that 
we  should  bring  the  timber  of  India  or  Australia  at  half  its 
present  cost ;  and  that  we  should  carry  on  the  fisheries  to  a 
much  greater  extent,  and  be  enabled  to  increase  every  branch 
of  industry  in  this  and  other  countries  to  a  very  large  extent. 
Shipowners  certainly  prognosticated    all    manner  of    evil 
likely  to  arise  from  the  repeal  of  the  navigation  laws.     They 
warned  the  nation  that  such  laws  had  raised  it  to  the  station 
it  held,  and  that  without  them  it  would  as  rapidly  go  down 


f 


240 


ECONOMIC  HISTORY. 


as  it  had  risen.  They  were  certain  that  the  repeal  of  such 
laws  would  reduce  shipping  property  fully  80  per  cent  in 
value,  and  introduce  the  cheap  navigation  of  other  countries 
in  competition  with  the  costly  navigation  of  this  country, 
and  that,  despairing  of  success,  the  British  shipowner  must 
retire  from  the  contest.  Really,  however,  the  advocates  of 
the  navigation  laws  had  little  to  say  in  their  favor  based  on 
substantial  facts.  The  committee  male  no  report  in  1847, 
but  the  general  impression  was  that  the  repeal  of  such  laws 
would  benefit  trade,  and  that  the  necessity  for  action  had 
become  imminent. 

Accordingly,  in  1848,  as  soon  as  public  attention  could  be 
given  to  the  subject,  Mr.  Labouchere,  in  committee  of  the  whole 
house,  moved  a  resolution  to  the  effect,  "  That  it  is  expedient 
to  remove  the  restrictions  which  prevent  the  carriage  of  goods 
by  sea  to  and  from  the  United  Kingdom  and  the  British  pos- 
sessions abroad,  and  to  amend  the  laws  regulating  the  coast- 
ing trade  of  the  United  Kingdom,  subject,  nevertheless,  to 
such  control  as  may  be  necessary,  and  also  to  amend  the  laws 
for  the  registration  of  ships  and  seamen."  But  a  concerted 
opposition  was  made  to  such  proposition,  and  Mr.  Hcrries 
moved  a  counter  resolution,  "That  it  is  essential  to  the 
national  interest  of  the  country  to  maintain  the  fundamental 
principles  of  the  navigation  laws,  subject  to  such  modifica- 
tions as  may  be  best  calculated  to  obviate  any  proved  incon- 
venience to  the  commerce  of  the  United  Kingdom  and  its 
dependencies,  and  without  danger  to  our  national  strength." 
The  discussion  was  long  and  animated,  and  the  two  oppos- 
ing views  were  fully  enforced  and  illustrated ;  but  it  ended, 
as  might  have  been  expected,  in  the  defeat  of  Mr.  Berries' 
amendment  by  a  majority  of  294  against  177.  But  the  ses- 
sion was  lost,  and  the  subject  had  to  be  deferred  to  another 
year.  Again,  however,  in  1849  Mr.  Labouchere  proposed 
the  same  resolution,  only  adding  that  provision  should  be 
made  giving  power  to  the  Queen  in  council  to  re-enact  these 
laws,  wholly  or  in  part,  with  regard  to  any  countries  as  to 
which  the  government  might  think  fit  that  they  should  be 
preserved.     Power  was  given  to  him  to  bring  in  a  bill,  and 


THE  CORN  LA  WS. 


241 


it  was  read  a  second  time  by  a  majority  of  266  to  210.  As 
originally  proposed  the  bill  was  intended  to  throw  open  the 
coasting  trade  as  well  as  the  foreign  trade,  but  the  govern- 
ment of  the  United  States  having  notified  their  refusal  to 
reciprocate  this  concession,  and  some  objection  having  been 
raised  by  the  department  of  customs  because  of  the  difficulty 
of  enforcing  effectual  regulations  to  guard  the  revenue  from 
danger,  the  clauses  relating  to  the  coasting  trade  were  with- 
drawn, and  the  bill  passed  into  law.*  But  even  the  restric- 
tion of  the  coasting  trade  was  ultimately  relinquished,  and 
both  the  navigation  on  the  coast  of  the  United  Kingdom  and 
the  manning  of  British  ships  were  left  entirely  free.^ 

1  12  and  18  Vict.  c.  29. 

^  16  and  17  Vict.  c.  107,  and  17  and  18  Vict.  c.  120. 


16 


BT  '11  '-r 


242 


ECONOMIC  HISTORY. 


X. 


THE  NEW  GOLD. 


From  Cairmks'  Essays  in  Political  Economy.* 


EBBAY  IL-THB  C0UR8B  OF  DEPRECIATION. 

NO  one,  I  think,  who  has  attended  to  the  discussions 
occasioned  by  the  recent  gold  discoveries,  can  have 
failed  to  observe,  on  the  part  of  a  large  number  of  those 
who  engage  in  them,  a  strange  unwillingness  to  recognize, 
among  the  inevitable  consequences  of  those  events,  a  fall 
in  the  value  of  money.     I  say,  a  strange  unwillingness,  be- 
cause we  do  not  find  similar  doubts  to  e.\ist  in  any  corr^ 
sponding  case.    With   respect  to  all  other  commodities,  it 
is  not  denied  that  whatever  facilitates  production  promotes 
cheapness ;  that  less  will  be  given  for  objects  when  they  can 
be  attained  with  less  trouble  and  sacrifice.    It  is  not  denied, 
for  example,  that  the  steam-engine,  the  spinning-jenny,  and 
the  mule  have  lowered  the  value  of  our  manufactures;  that 
railways  and  steamships  have  lessened  the  expense  of  travel- 
ling, or  that  the  superior  agricultural  resources  of  foreign 
O'^untries,  made  available  through  free  trade,  keep  down  the 
price  of  our  agricultural  products.    It  is  only  in  the  case  of 
the  precious  metals  that  it  is  supposed  that  a  diminution  of 
cost  has  no  tendency  to  lower   value,  and  that,  however 
rapidly  supply  may  be  increased,  a  given  quantity  will  con- 
tinue to  command  the  same  quantity  of  other  things  as  before. 
Among  persons  unacquainted  with  economic  science,  the 
prevalence  of  this  opinion  is  doubtless  principally  due  to 
those  ambiguities  of  language,  and  consequent  confusion  of 
ideas,  with  which  our  monetary  phraseology,  unfortunately, 

1  London :  McMillan  and  Co.,  1873. 


THE  NEW  GOLD. 


248 


abounds,  many  of  which  tend  to  encourage  the  notion  of  some 
ricculiar  and  constant  stability  in  the  value  of  the  precious 
metals.  Thus,  the  expression  "  a  fixed  price  of  gold  *'  has  led 
Bonic  people  to  imagine  that  the  possibility  of  a  depreciation 
of  this  metal  is  precluded  by  our  mint  regulations.  The 
double  sense,  again,  of  the  phrase, "  value  of  money,"  has 
countenanced  the  same  error  ;  for  people,  perceiving  the  rate 
of  interest  (which  is  the  measure  of  the  value  of  money,  in 
one  sense  of  the  phrase)  remaining  high,  while  the  supply  of 
gold  was  rapidly  increasing,  —  perceiving  money  still  scarce 
according  to  this  criterion,  notwithstanding  the  increase  in  its 
production,  —  have  asked  whether  this  did  not  afford  a  pre- 
sumption that  its  value  would  be  permanently  preserved  from 
depreciation,  a  bank  rate  of  discount  at  6,  8,  or  10  per  cent, 
as  they  remarked,  p.ffording  small  indication  of  money  becom- 
ing too  abundant. 

It  appears  to  mc,  however,  that  misconceptions  respecting 
the  influence  of  an  increased  supply  of  gold  upon  its  value, 
and  upon  general  prices,  are  by  no  means  confined  to  the  class 
who  could  be  misled  by  such  fallacies,  but  that  even  among 
economists  (at  least  among  economists  in  this  country)  we  may 
observe  the  same  indisposition  to  believe  in  an  actual  and  pro- 
gressive depreciation  of  this  metal.  It  is  not,  indeed,  denied 
—  at  least,  I  presume  it  is  not  denied  —  by  any  one  pretend- 
ing to  economic  knowledge,  that  the  enlarged  production  of 
gold  now  taking  place  has  a  tendency  to  lower  its  value ;  but 
it  seems  to  be  very  generally  supposed  that  the  same  cause  — 
the  inereasod  trolrl  production  —  has  the  effect,  through  its 
influp'  of  calling  into  operation  so  many  tenden- 

""  lature  that,  on  the  whole,  the  depreciation 

1  V  extreme  slowness,  the  results  being  dis- 
l)crsed  u  a  period  so  great  as  to  take  from  them  any  prac- 
tical iiiiportance,  and  that,  at  all  events,  up  to  the  present 
tune  n  n^nsible  effect  upon  prices  proceeding  from  this  cause 
lias  become  perceptible. 

The  existence  of  this  opi'  w  among  economists  is,  I  appre- 
hend, to  be  attributed  in  degree  to  the  circumstance  that 
80  few  have  taken  the  pai      to  compare  the  actual  prices  of 


244 


ECONOMIC  HISTORY. 


the  present  time  with  those  of  tho  period  previous  to  the  gold 
discoveries,  but  much  more  to  the  fact  that  the  character  of 
the  new  agency  and  the  mode  of  its  operation  are  not,  in 
general,  correctly  conceived.  I  believe  the  most  general 
opinion  with  reference  to  the  action  of  an  increased  supply 
of  money  upon  its  value  is,  that  it  is  uniform,  takes  place, 
that  is  to  say,  in  the  same  degree  in  relation  to  all  coranaodi- 
ties  and  services,  and  that  therefore  prices,  so  far  as  they  are 
influenced  by  an  increase  of  money,  must  exhibit  a  uniform 
advance ;  ^  and,  no  such  uniformity  being  observed  in  the 
actual  movement  of  prices,  the  inference  has  not  unnaturally 
been  drawn  that  such  enhancement  as  has  taken  place  is  not 
due  to  this  cause ;  that  it  is  not  money  which  has  fallen,  but 
commodities  which  have  risen  in  value. 

Now  I  am  quite  prepared  to  admit  that  an  increase  of 
money  tends  ultimately,  where  the  conditions  of  production 
remain  in  other  respects  the  same,  to  affect  the  prices  of  all 
commodities  and  services  in  an  equal  degree ;  but  before  this 
result  is  attained  a  period  of  time,  longer  or  shorter  according 
to  the  amount  of  the  augmentation  and  the  general  circum- 
stances of  commerce,  must  elapse.  In  the  present  instance 
the  additions  which  are  being  made  to  the  monetary  systems 
of  the  world  are  upon  an  enormous  scale,  and  the  disturbance 
effected  in  the  relation  of  prices  is  proportionally  great. 
Under  such  circumstances  it  is  very  possible  that  the  inequali- 
ties resulting  may  net  find  their  correction  throughout  the 
whole  period  of  progressive  depreciation,  —  a  period  which, 
even  with  our  present  facilities  of  production  and  distribution, 
may  easily  extend  over  some  thirty  or  forty  years.  During 
this  transitionary  term  the  action  of  the  new  gold  will  not  be 
uniform,  but  partial.  Certain  classes  of  commodities  and 
services  will  be  affected  mucL  more  powerfully  than  others. 
Prices  generally  will  rise,  but  with  unequal  steps.    Neverthe- 

*  "In  relation  to  the  influence  of  th  gold  discoveries  on  the  prices  of  agri- 
cultural produce,  it  is  plain  that  it  could  be  only  the  same  upon  tliem  as  upon 
those  of  any  other  class  of  commodities.  If  it  has  caused  a  rise  of  20  pfr  cent  m 
their  favor,  tt  must  have  caused  a  rite  of  20  per  cent  in  everything  else."  ("  Times, 
City  article,  August  6, 1862. )  And  the  same  assumption,  cither  expressed  or  im- 
plied, runs  through  most  of  the  reasoning  which  I  have  seen  on  this  questioo. 


"1 


THE  NEW  GOLD. 


245 


less  there  will  be  in  these  apparent  irregularities  nothing 
either  capricious  or  abnormal.  The  movement  will  be  gov- 
erned tliroughout  its  course  by  economic  laws ;  and  it  is  the 
purpose  of  the  present  inquiry  to  ascertain  the  nature  of 
these  laws  and  the  mode  of  their  operation. 

The  process  by  which  an  increased  production  of  gold  oper- 
ates in  depreciating  the  value  of  the  metal  and  raising  general 
prices  appears  to  be  twofold :  it  acts,  first,  directly  through 
the  medium  of  an  enlarged  money  demand,  and  secondly, 
indirectly  through  a  contraction  of  supply.* 

When  an  increased  amount  of  money  comes  into  existence, 
there  is,  of  course,  an  increased  expenditure  on  the  part  of 
those  into  whose  possession  it  comes,  the  immediate  effect  of 
which  is  to  raise  the  prices  of  all  commodities  which  fall  under 
its  influence.  It  is  obvious,  however,  that  the  advance  in 
price  which  thus  occurs  will  be,  in  its  full  extent,  temporary 
only ;  since  it  is  immediately  followed  by  an  extension  of  pro- 
duction to  meet  the  increased  demand,  and  this  must  again 
lead  to  a  fall  in  price.  Some  writers  who  have  treated  this 
question,  observing  this  effect,  have  somewhat  hastily  con- 
cluded that  under  the  operation  of  this  principle  the  level  of 
prices  would  never  permanently  be  altered,  since,  as  they 
have  urged,  each  addition  to  the  circulating  medium  forming 
tlie  basis  of  a  corresponding  increase  of  demand,  gives  a 
corresponding  impetus  to  production ;  every  increase  of 
money  thus  calls  into  existence  an  equivalent  augmentation 
in  the  quantity  of  things  to  be  circulated ;  and  the  proportion 
between  the  two  not  being  ultimately  disturbed,  prices,  it  may 
be  presumed,  will  return  to  their  original  level.'''    The  least 

'  According  to  Mr.  Newmarch  ("History  of  Prices,"  vol.  iv.,  pp.  224-226), 
the  depreciation  of  money  may  occur  by  a  process  wliicli  is  neitiier  of  these, 
when  money  operates  upon  prices  neither  through  demand  nor  yet  through 
supply, but  "by  reason  of  augmented  quantity."  I  must  confess  myself  wholly 
unable  to  conceive  the  process  here  indicated. 

'  [It  may  be  worth  wliile  to  preserve  a  specimen  of  the  sort  of  Political 
Economy  that  was  talked  and  written  on  this  subject  some  fifteen  years  ago. 
A  leailipR  article  in  the  Examiner  (December  13, 1850)  contains  the  following: 
'The  additional  supply  of  the  precious  metals  has  stimulated  the  industry  of 
the  world,  and  in  fact  produced  an  amount  of  wealth  in  representing  whith 
they  have  been  themselves,  as  it  were,  absorbed.  .  .  .  But  the  produce  of 


i  \   ^ 


\'        -II 


246 


ECONOMIC  HISTORY. 


reflection,  however,  will  show  that  this  doctrine  has  been 
suggested  by  a  very  superficial  view  of  the  phenomena. 

For  —  not  to  press  the  obvious  redv/Ctio  ad  absurdum  to 
which  this  argument  is  liable  —  how  is  this  extension  of  pro- 
duction to  be  carried  out  ?  In  the  last  resort  it  is  only  possible 
through  a  more  extended  employment  of  labor.  But,  when 
once  all  the  hands  in  a  community  are  employed,  the  effect  of 
a  further  competition  for  labor  can  only  be  to  raise  wages; 
and,  wages  once  being  generally  raised,  it  is  plain  (supposing 
all  other  things  to  remain  the  same)  tliat  profits  can  only  be 
maintained  by  a  corresponding  elevation  of  prices.  When, 
therefore,  the  influence  of  the  new  money  has  once  reached 
wages,  it  is  evident  that  there  will  be  no  motive  to  continue 
production  to  that  point  which  would  bring  prices  to  their 
former  level,  and  that  consequently  an  elevation  of  price  must, 
at  this  stage  of  the  proceeding,  be  permanently  established. 

So  far  as  regards  articles  which  fall  directly  under  the 
action  of  the  new  money.  With  respect  to  those  which  do 
not  happen  to  come  within  the  range  of  the  new  demand, 
price  is,  I  conceive,  in  their  case  raised  by  an  indirect  action 
of  the  new  money  in  curtailing  supply. 

"We  have  seen  that  the  effect  of  the  efforts  to  extend  pro- 
duction in  the  directions  indicated  by  the  new  expenditure 
must  be  to  raise  wages ;  but  it  is  plainly  impossible  that  wages 
should  continue  to  advance  in  any  of  the  principal  depart- 
ments of  industry  without  affecting  their  rates  in  the  rest; 
whence  it  will  happen  that,  under  the  operation  of  the  new 
monetary  influence,  some  departments  of  industry  will  expe- 
rience a  rise  of  wages  before  any  advance  takes  place  in  the 
prices  of  the  new  commodities  produced  by  the  laborers  whose 
wages  have  risen.  It  is  evident  that  in  all  departments  of 
industry  which  may  be  thus  affected— in  which  prices  will 
not  have  shared  the  advance  which  has  affected  wages— 


the  Australian  and  Californlan  gold,  as  well  as  that  of  silver  whicli  has  sccom- 
panled  it,  is  likely  to  go  on ;  and  it  may  be  asked  if  this  must  not  in  course  of 
time  produce  depreciation.    We  think  it  certainly  is  not  likely  to  do  so; .  • 
on  the  contrary,  it  will  surely  be  absorbed  by  increasing  wealth  and  population 
as  fast  as  it  is  produced."] 


THE  NEW  GOLD. 


247 


profits  will  fall  below  the  general  average ;  the  effect  of  which 
must  be  to  discourage  production  until,  by  a  contraction  in 
the  supply  of  the  articles  thus  furnished,  the  price  shall  be 
raised  up  to  that  point  which  will  place  the  producers  on  the 
same  footing  of  advantage  as  those  in  other  walks  of  industry. 

An  increased  supply  of  money  thus  tends,  by  one  mode  of 
its  operation,  to  raise  prices  in  advance  of  wages,  and  thus  to 
stimulate  production ;  by  another,  to  raise  wages  in  advance 
of  prices,  and  thus  to  check  it ;  in  both,  however,  to  raise 
wages,  and  thus  ultimately  to  render  necessary,  in  order  to 
the  maintenance  of  profits,  a  general  and  permanent  elevation 
of  price.^ 

This  being  the  process  by  which  increased  supplies  of 
money  operate  in  raising  prices,  in  order  to  ascertain  the 
laws  of  their  advance,  we  must  attend,  first,  to  the  direction 
of  the  new  expenditure ;  secondly,  to  the  facilities  for  extend- 
ing the  supply  of  different  kinds  of  commodities  ;  and,  thirdly, 
to  the  facilities  for  contracting  it. 

With  regard  to  the  first  point,  —  the  direction  of  the  new 
expenditure,  —  this  will  naturally  be  determined  by  the  habits 
and  tastes  of  tho  persons  into  whose  possession  the  new  money 
comes.  Those  persons  are  the  inhabitants  of  the  gold  coun- 
tries, and,  after  them,  those  in  other  countries  who  can  best 
supply  their  wants.  Speaking  broadly,  we  may  say  that  the 
persons  who  will  chiefly  benefit  by  the  gold  discoveries  belong 
to  the  middle  and  lower  ranks  of  society ;  in  a  large  degree  to 
the  lowest  rank,  the  class  of  unskilled  laborers.  The  direction 
of  tlie  new  expenditure  will  consequently  be  that  indicated  by 
the  habits  and  tastes  of  these  classes,  and  the  commodities 

'  It  must  not  be  supposed  that  this  is  Inconsistent  with  the  fundamental  doc- 
trine maintained  by  Ricardo,  that  "hit;h  wages  do  not  malce  high  prices." 
That  doctrine  assumes  tlie  value  of  monty  to  be  constant  Ricardo  was  quite 
aware  of  the  exception  to  the  general  principle,  and  points  It  out  in  the  follow- 
in)!  paesaefe : — 

"  Money,  being  a  variable  commodity,  the  rise  of  money  wages  will  be  fre- 
quently occasioned  by  a  fall  in  the  value  of  money.  A  rise  of  wages  from  this 
w"«e  will,  indeed,  be  invariably  accompanied  by  a  rise  in  the  price  of  commod- 
ities; but  in  such  cases  it  will  be  found  that  labor  and  all  commodities  have 
not  varied  in  regard  to  each  other,  and  that  the  variation  lias  been  confined  to 
ffloney."    (Rjcardo's  Works,  second  edition,  p.  31.) 


248 


ECONOMIC  HISTORY. 


which  will  be  most  affected  by  it  will  be  those  which  fall  most 
largely  within  their  consumption. 

With  respect,  secondly,  to  facilities  for  extending  supply, 
these  will  be  found  to  depend  principally  upon  two  circum- 
stances :  first,  on  the  extent  to  which  machinery  is  employed 
in  production ;  and,  secondly,  on  the  degree  in  which  the  pro- 
cess of  production  is  independent  of  natural  agencies  which 
require  time  for  accomplishing  their  ends.  The  distinction 
marked  by  these  two  conditions,  it  will  be  found,  corresponds 
pretty  accurately  with  two  other  distinctions, — with  the  dis- 
tinction, namely,  between  raw  and  manufactured  products; 
and,  among  raw  products,  with  that  between  those  derived  from 
the  animal  and  those  derived  from  the  vegetable  kingdom.  An 
article  of  finished  manufacture,  in  the  production  of  which  ma- 
chinery bears  a  principal  part,  and  which  is  independent,  cr 
nearly  so,  of  natural  processes,  may  after  a  short  notice  be 
rapidly  multiplied  to  meet  any  probable  extension  of  demand. 
An  article  of  raw  produce,  being  in  a  less  degree  under  the  do- 
minion of  machinery,  and  depending  more  upon  natural  pro- 
cesses which  require  time  for  their  accomplishment,  cannot 
be  increased  with  the  same  facility ;  and  production  will  con- 
sequently, in  this  case,  be  comparatively  slow  in  overtaking 
an  extension  of  demand.  But  of  raw  products,  those  derived 
from  the  animal  are  still  less  under  the  dominion  of  machinery 
than  those  derived  from  the  vegetable  kingdom,  and  still  more 
dependent  on  the  slow  processes  of  nature,  and,  consequently, 
production  must,  in  their  case,  be  still  more  tardy  in  over- 
taking demand.  Supposing,  then,  the  extension  of  demand  to 
be  in  all  three  cases  the  same,  the  immediate  rise  of  price 
will,  cceteris  jmrihua,  be  in  all  the  same ;  but  in  the  case  of 
articles  of  finished  manufacture,  this  r?  i  will  be  quickly  cor- 
rected by  the  facilities  available  for  increased  production, 
while  in  raw  vegetable  products  the  correction  will  take  place 
more  slowly,  and  in  raw  animal  products  more  slowly  still.' 

I  The  following  passage  occurs  in  the  "History  of  Prices,"  vol  vi., p.  1"0: 
"The  groups  of  commodities  which  exhibit  the  most  important  instances  of  a 
rise  of  price  are  the  raw  materials  most  extensively  used  in  manufactures,  and 
the  production  of  which  does  not  admit  of  rapid  extension ;  and,  second,  the 


THE  NEW  GOLD. 


249 


But,  thirdly,  I  said  that  the  progress  of  prices  under  the 
influence  of  the  gold  supplies  would  be  governed  by  the  facil- 
ity with  which  supply  can  be  contracted.  Every  one  who  has 
practical  experience  of  manufacturing  operations  is  aware 
tiiat,  when  capital  has  once  been  embarked  in  any  branch  of 
production,  it  cannot  at  once  be  removed  to  a  different  one 
the  moment  the  needs  of  society  may  require  a  change ; 
wiience  it  liappens  that,  on  any  sudden  change  taking  place 
ill  the  direction  of  a  nation's  expenditure,  or  when  from  mis- 
calculation production  has  been  extended  beyond  existing 
wants,  producers  frequently  choose  to  continue  their  business 
at  diminished  profits  or  even  at  a  positive  loss,  rather  than 
incur  still  greater  damage  by  suffering  their  capital  to  lie  idle, 
or  by  attempting  to  transfer  it  suddenly  into  some  new  branch 
of  production.  The  supply  of  a  commodity  is  not  therefore 
always,  or  generally,  at  once  contracted  on  the  demand  for  it 
falling  off,  or  on  its  production  becoming  less  profitable,  and, 
where  this  is  so,  it  is  evident  that  prices  must  at  times 
continue  depressed  below  the  normal  level ;  the  duration  of 
the  depression  depending  on  the  length  of  time  required  to 
effect  a  transference  of  the  unproductive  capital  to  some  more 
lucrative  investment.  Now,  the  difficulty  of  accomplishing 
this  will  generally  be  in  direct  proportion  to  the  amount  of 


groups  of  commodities  in  which  there  is  little,  if  any,  rise  of  price  in  1857,  as 
compared  witli  1851,  are  articles  of  colonial  and  tropical  produce,  the  supply 
of  wIiIlIi.  (Imwn  from  a  variety  of  sources,  does  admit  of  being  considerably 
and  expeditiously  enlarged."  The  fact  of  the  rise  of  price  in  raw  materials  is 
iierc  admitted,  though,  in  ascribing  that  rise,  as  by  implication  the  passage 
does,  to  the  paucity  of  the  sources  of  supply,  the  explanation  is,  as  I  conceive, 
erroneous.  Tiie  sources,  for  example,  from  which  tea  and  sugar  are  drawn  are 
not  more  various  than,  nor  indeed  so  various  as,  those  from  wliicii  beef  and  mut- 
ton, butter  and  provisions,  timber,  tallow,  and  leather  arc  drawn ;  yet  all  these 
latter  articles  have  very  considerably  advanced  in  price.  Again,  among 
colonial  and  tropical  produce  Mr.  Newmarch  includes  rum  and  tobacco,  and  he 
miglit  also  liave  included  cotton ;  yet  these  articles,  though  falling  within  the 
class  wliich  he  says  admits  of  being  expeditiously  enlarged,  and  which,  there- 
fore, according  to  his  theory,  should  n<A  have  risen  in  price,  have,  in  fact  risen  in 
a  very  marked  manner.  It  appears  to  me  that  these  phenomena  can  only  be 
understood  by  reference  to  the  principle  which  I  have  endeavored  to  explain 
further  on  — namely,  the  efficacy  of  the  currency  of  different  countries  in 
determining  local  prices. 


250 


ECONOMIC  HISTORY. 


m 


fixed  capital  employed ;  and  the  principal  form  in  which  fixed 
capital  exists  is  that  of  machinery.  It  is,  therefore,  in  articles 
in  the  production  of  which  machinery  is  extensively  employed 
—  that  is  to  say,  in  the  more  highly  finished  manufactures— 
that  the  contraction  of  supply  will  be  most  difficult ;  and  this 
it  will  be  observed,  is  also  the  kind  of  commodities  for  extend- 
ing the  supply  of  which  the  facilities  are  greatest.  While, 
therefore,  manufactured  articles  can  never  be  very  long  in 
advance  of  the  general  movement  of  prices,  they  may,  of  all 
commodities,  be  the  longest  in  arrear  of  it. 

The  operation  of  this  principle  will  be  shown  chiefly  in  that 
class  of  articles  which  feels  the  effect  of  the  new  gold  only 
through  its  indirect  action  —  that  is  to  say,  through  its  action 
upon  wages.  With  respect  to  such  article  there  is  no  exten- 
sion of  demand,  and  the  price  consequently  can  only  be  raised 
through  a  contraction  of  supply.  It  is  evident  that  of  all 
commodities  this  is  the  class  in  which  the  rise  of  price  must 
proceed  most  slowly. 

From  the  foregoing  considerations,  then,  I  arrive  at  the  fol- 
lowing general  conclusions :  — 

First.  —  That  the  commodities  the  price  of  which  maybe 
expected  first  to  rise  under  the  influence  of  the  new  money  are 
those  which  fall  most  extensively  within  the  consumption  of 
the  productive  classes,  but  more  particularly  within  the  con- 
sumption of  the  laboring  and  artisan  section  of  these. 

Secondly.  —  That  of  such  commodities,  that  portion  which 
consists  of  finished  manufactures,  though  their  price  may  in 
the  first  instance  be  rapidly  raised,  cannot  continue  long  in 
advance  of  the  general  movement,  owing  to  the  facilities 
available  for  rapidly  extending  the  supply ;  whereas,  should 
the  production,  from  over-estimation  of  the  increasing  require- 
ments, be  once  carried  to  excess,  their  prices,  in  consequence 
of  the  difficulty  of  contracting  supply,  may  be  kept  for  some 
considerable  time  below  the  normal  level. 

Thirdly. — That  such  raw  products  as  fall  within  the  con- 
sumption of  the  classes  indicated,  not  being  susceptible  of  the 
same  rapid  extension  as  manufactures,  may  continue  for  some 
time  in  advance  of  the  general  movement,  and  that,  among  raw 


THE  NEW  GOLD. 


251 


products,  the  effects  will  be  more  marked  in  those  derived  from 
the  animal  than  in  those  derived  from  the  vegetable  kingdom. 

Fourthly.  —  That  the  commodities  last  to  feel  the  effects  of 
the  new  money,  and  which  may  be  expected  to  rise  most 
slowly  under  its  influence,  are  those  articles  of  finished  manu- 
facture whicl)  do  not  happen  to  fall  within  the  range  of  the 
new  expenditure ;  such  articles  being  affected  only  by  its 
indirect  action,  and  this  action  being  in  their  case  obstructed 
by  impediments  to  the  contraction  of  supply. 

This  is  one  class  of  laws  by  which  I  conceive  the  ascending 
movement  in  prices  will  be  governed  ;  and  up  to  this  point  I 
have  the  satisfaction  of  finding  my  conclusions  very  fully 
corroborated  by  the  independent  investigations  of  a  French 
economist,  M.  Levasseur,  who,  in  some  articles  lately  con- 
tributed by  him  to  the  Journal  dea  ^conomistes,  has,  by  an 
entirely  different  line  of  investigation  from  that  which  I  have 
followed, —  namely,  by  generalizing  on  the  statistics  of  prices 
in  France  during  the  period  of  1847  to  1856, — .arrived  at 
conclusions  in  the  main  points  identical  with  those  which  I 
have  now  advanced.^ 

There  is,  however,  another  principle  to  which  I  venture  to 
call  attention,  which  has  not,  so  far  as  I  know,  been  noticed 
by  any  of  the  economists  who  have  treated  this  question,  but 
which,  It  appears  to  me,  must  exercise  a  powerful  influence  on 
the  course  of  the  movement.  The  principle  to  which  I  refer 
is  that  efficacy  which  resides  in  the  currency  of  each  country, 
into  which  any  portion  of  the  new  money  may  be  received, 
for  determining  the  effect  of  this  infusion  on  the  range  of 
local  prices. 

It  is  evident  that  the  quantity  of  metallic  money  necessary 
to  support  any  required  advance  of  prices  throughout  a  given 
range  of  business  will  vary  with  the  character  of  tlie  currency 
into  which  it  is  received ;  that  the  quantity  required  will  be 
greater  in  proportion  as  the  metallic  element  of  the  currency 
is  greater ;  and,  on  the  other  hand,  less  in  proportion  as  the 
credit  element  prevails.     If  the  currency  of  a  country  be 

'  See  Caiines,  Appendix,  p.  360,  for  a  summary  of  M.  Levasseur's  con- 
clusions. 


!f1 

ii'; ; 

p 

m          \ 

t  ■ 

252 


ECONOMIC  HISTORY. 


purely  metallic,  a  given  addition  of  coin  will  increase  the  ag. 
gregate  medium  of  exchange  in  that  country  only  by  the  same 
amount ;  if,  on  the  other  hand,  the  currency  consists  largoh- 
of  credit  contrivances,  each  addition  to  its  coin  becomes  the 
basis  of  a  new  superstructure  of  credit  in  the  form  of  bank- 
notes and  credits,  bills  of  exchange,  checks,  etc.,  and  the  ag- 
gregate circulation  is  increased,  not  simply  by  the  amount  of 
the  added  coin,  but  by  the  extent  of  the  new  fabric  of  credit 
of  which  this  coin  is  made  the  foundation.  Applying  this 
principle  to  the  different  countries  of  the  world,  it  foUows  that 
a  given  addition  to  the  metallic  stock  of  Great  Britain  or  the 
United  States,  in  whose  monetary  systems  credit  is  very  effi- 
cacious, will  cause  a  greater  expansion  of  the  total  circulation, 
and  therefore  will  support  a  greater  advance  in  general  price3, 
than  the  same  addition  to  the  currency  of  countries  like  France, 
in  which  credit  is  less  active ;  and  that,  again,  the  effect  in 
countries  like  France  will  be  greater  than  in  countries  like 
India  or  China,  in  which  the  currencies  are  almost  purely 
metallic,  and  where  credit  is  comparatively  little  used. 

Now,  this  being  so,  if  we  consider  further  that  the  coun- 
tries wliich  receive  in  the  first  instance  the  largest  share  of 
the  new  money  —  namely,  England  and  the  United  .States  — 
are  also  those  in  which,  from  the  character  of  their  curren- 
cies, a  given  amount  of  coin  will  produce  the  greatest  effect; 
and,  on  the  other  hand,  that  Asiatic  communities,  in  which, 
from  the  weakness  of  the  credit  clement,  the  currencies  are 
least  expansible,  receive  but  a  small  portion  of  their  share  of 
the  new  money  direct  from  the  gold  countries;^  being  com- 

1  (From  statistics  recently  furnished  by  the  Economist,  I  learn  that  the  facts 
have  not  been  as  I  here  assumed,  at  least  since  1858  (the  date  from  wliicli  full 
returns  of  specie  imports  have  been  published  by  the  Board  of  Trade) ;  and  it  is 
probable  I  was  mistaken  in  my  supposition  with  regard  to  what  iiad  oLxiimd 
before  that  time  Since  1858,  of  .£'.)0,000,000  of  gold  received  and  retiiiiied  liy 
India  and  the  Kast  «ome  €40,000  000,  more  than  a  half  of  tlie  wliole,  appear 
to  have  gone  there  ihm-ili/  from  Australia,  the  remainder  only  liaving  conn.' 
througli  Kurope  1  iiis  error  ms  to  matter  of  fact  will,  no  doul)t,  afftct  to  smiie 
extent  the  conelusinn  coniiii'ltMl  for.  The  causes  tending  to  a  (livergciuenl 
European  from  Asiatic  pricos  liave  not  been,  it  seems,  as  powerful  as  Ilii"i 
supposed,  and,  in  point  of  fact,  this  feature  in  the  movement  lias  been  li'ss 
marked  than  I  sketclied  it ,  but  for  this,  other  causes  besides  tliat  noticed  liere 
have  been  responsible  (1872).     See  Introductory  Chapter,  p.  12  | 


THE  NEW  GOLD. 


253 


pelled  to  wait  for  the  remainder  till  it  has  flowed  through  the 
principal  markets  of  Europe  and  America,  affecting  prices  in 
its  transit,  —  if,  I  say,  we  consider  these  facts  in  connection 
with  the  principle  to  which  I  have  adverted,  I  think  we  must 
recognize  in  that  principle  —  in  the  influence  of  the  currency 
of  each  country  on  the  range  of  its  local  prices  —  an  agency 
which  must  modify  in  no  small  degree  the  general  character 
of  the  movement  which  is  now  in  progress. 

In  speaking  of  the  influence  of  the  currency  of  a  country  on 
the  range  of  its  local  prices,  I  should  explain  that  I  use  the 
words  "local  prices"  in  a  somewhat  restricted  sense ;  namely, 
with  reference  to  the  locality  in  which  commodities  are  pro- 
duced, not  to  that  in  which  they  are  sold,  their  price  in  the 
latter  place  being  always  determined  by  their  price  in  the 
former.  Thus,  when  I  speak  o*  Australian,  English,  or  In- 
dian prices,  I  shall  be  understood  to  mean  the  prices  of  their 
several  products  in  Australia,  England,  or  India. 

Understanding  the  words,  then,  in  this  sense,  let  us  see 
how  far  local  prices  are  likely  to  be  affected  by  the  cause  to 
which  I  have  adverted. 

In  the  first  place,  then,  let  it  be  observed  that  a  very  re- 
markable divergence  of  local  prices  from  the  range  previously 
obtaining  in  the  international  scale  has  already  taken  place.* 
Tlie  prices  of  all  articles  produced  in  Australia  and  California 
are  at  present  on  an  average  from  two  to  three  times  higher 
than  those  which  prevailed  previous  to  the  gold  discoveries ; 
these  rates  have  now  been  maintained  for  several  years,  and 
are  likely  to  continue ;  but,  while  this  advance  has  taken  place 
in  the  gold  countries,  in  no  part  of  the  world  external  to  those 
regions  have  prices  advanced  by  so  much  as  one  third.  The 
possibility  of  a  divergence  of  local  prices  is  thus,  as  a  matter 
of  fact,  established ;  and  the  explanation  of  the  phenomenon 
I  take  to  be  this.  The  sudden  cheapening  of  gold  in  Australia 
and  CaUfornia  quickly  led,  through  the  action  of  competition 
among  the  different  departments  of  industry,  to  a  corre- 
sponding advance  in  the  prices  of  everything  produced  in 
those  countries ;  this  advance  being  in  their  case  possible,  be- 

>  See  Cairnes,  pp.  24,  26. 


■  ■• 


254 


ECONOMIC  HISTORY. 


cause,  from  the  limited  extent  of  the  transactions,  the  local 
circulation  was  quickly  raised  to  the  point  sufficient  to  sustain 
a  double  or  triple  elevation ;  but  it  was  impossible  that  the 
currencies  of  all  countries  should  be  expanded  in  the  same 
proportions  in  the  same  time ;  and,  consequently,  prices  in 
other  countries  have  not  risen  with  the  same  rapidity.    The 
cause,  therefore,  of  this  divergence  of  local  prices  —  the  cir- 
cumstance which  keeps  general  prices  in  arrear  of  that  ele- 
vation which  they  have  attained  in  Australia  and  California  » 
is  the  difficulty  of  expanding  the  currencies  of  the  world  to 
those  dimensions  which  such  an  advance  would  require.  This 
expansion,  however,  is  being  gradually  effected  by  the  process 
we  are  now  witnessing,  —  the  increased  production  of  the  pre- 
cious metals,  and  their  diffusion  throughout  the  world.    But, 
as  I  have  said,  the  diffusion  is  not  uniform  over  the  various 
currencies,  nor  are  the  currencies  receiving  the  new  supplies 
of  uniform  susceptibility ;  and  the  inequalities  are  such  as  to 
aggravate  each  other ;  the  currencies  which  are  the  most  sen- 
sitive to  an  increase  of  the  precious  metals  reccivinj;^  in  the 
first  instance  neai'ly  the  whole  of  the  new  gold;  while  the 
least  sensitive  currencies  are  the  last  to  receive  their  share. 
And  these,  it  appears  to  me,  are  grounds  for  expecting  among 
other  countries  further  examples  of  that  phenomenon  of  local 
divergence,  of  which  one  has  already  been  afforded  by  the  gold 
countries. 

To  judge,  however,  of  the  extent  to  which  such  local  vari- 
ations of  price  can  be  carried,  we  must  advert  to  the  corrective 
influences  which  the  play  of  international  dealings  calls  into 
action ;  and  these  appear  to  me  to  resolve  themselves  into  the 
two  following :  namely,  first,  the  corrective,  which  is  supplied 
by  the  competition  of  different  nations,  producers  of  the  same 
commodities,  in  neutral  markets ;  and  secondly,  that  which 
exists  in  the  reciprocal  demand  of  the  different  commercial 
countries  for  each  other's  productions. 

The  first  form  of  the  corrective  is  obviously  the  most  pow- 
erful, and  must,  so  far  as  its  operation  extends,  at  once  im- 
pose a  check  upon  any  serious  divergence.  Thus  it  is  evident 
that  prices  in  England  and  the  United  States  could  not  pro- 


THE  NEW  GOLD. 


255 


ceed  very  much  in  advance  of  prices  on  the  continent  of  Europe, 
since  tho  certain  cifcct  of  such  an  occurrence  would  be  to  send 
consumers  from  tho  dearer  to  the  cheaper  markets,  and  thus 
to  divert  the  tide  of  gold  from  the  currencies  of  England  and 
America  to  the  currencies  of  France,  Germany,  and  other  con- 
tinental States,  —  a  process  which  would  be  continued  until 
prices  were  restored  to  nearly  the  same  relative  level  as  before. 
But  it  is  only  among  nations  which  are  competitors  in  the 
same  description  of  commodities  thit  this  equalizing  process 
comes  into  operation.  As  between  countries  like  England  and 
America  on  the  one  hand,  and  India  and  China  on  the  other, 
—  in  which  the  climate,  soil,  and  general  physical  conditions 
differ  widely,  in  which,  consequently,  the  staple  industries  are 
different,  and  whose  productions  do  not,  therefore,  come  into 
competition  in  the  markets  of  the  world,  —  this  corrective  in- 
fluence would  be  felt  slightly  or  not  at  all.  The  only  check 
which  could  be  counted  on  in  this  case  would  be  that  far 
weaker  one  which  is  furnished  by  the  action  of  reciprocal  de- 
mand in  international  dealings.  Thus,  supposing  prices  to 
rise  more  rapidly  in  England  than  in  India,  this  must  lead,  on 
the  one  hand,  to  an  increased  expenditure  in  England  on  In- 
dian commodities,  and,  on  the  other,  to  a  diminished  expendi- 
ture in  India  on  English  commodities,  with  this  result,  —  a 
steady  efflux  of  the  precious  metals  from  the  former  to  the 
latter  country.  Such  an  efflux,  as  commercial  men  are  well 
aware,  has  long  been  a  normal  phenomenon  in  our  Eastern 
trade,  but  it  has  lately  assumed  dimensions  which  constitute 
it  a  now  fact  needing  a  specio!  explanation.  I  believe  that 
exphination  is  to  bo  found  in  the  circumstances  to  which  I  am 
calling  attention. 

English  and  American  prices,  and  with  them  money  incomes 
in  England  and  America,  have,  under  the  action  of  the  new 
gold,  been  advancing  more  rapidly  than  prices  and  incomes  in 
Oriental  countries ;  and  the  result  has  been  a  change  in  the 
relative  indebtedness  of  those  two  parts  of  the  world,  leading 
to  a  transfer  to  the  creditor  country  of  corresponding  amounts 
of  that  material  which  forms  the  universal  equivalent  of  com- 
merce.   It  is  true,  indeed,  that  other  causes  have  also  contrib- 


T^ 


256 


ECONOMIC  HISTORY. 


I"! 


uted  to  this  result,  and  in  particular  I  may  mention  the  failure 
of  the  silk  crop  in  Europe,  which  has  largely  thrown  us  upon 
China,  as  a  means  of  supplementing  our  deficient  supplies. 
But  the  main  cause  of  the  phenomenon  in  its  present  propor- 
tions is,  I  conceive,  to  be  found,  not  in  any  such  mere  tempo- 
rary disturbances,  but  in  the  natural  overflowing  (coiiHcqucnt 
upon  the  increase  of  the  precious  metals)  of  the  redundant 
currencies  of  Europe  and  America  into  the  more  absorbent 
and  impassive  systems  of  Asia.*  This,  then,  I  say,  is  tlic  onir 
substantial  corrective  afforded  to  the  advance  of  prices  in 
Europe  and  America  beyond  their  former  and  normal  level  in 
relation  to  prices  in  the  East ;  and  the  question  is,  will  this 
corrective  be  sufhcient  to  neutralize  the  tendency  to  a  diver- 
gence ?  Will  the  flow  of  the  precious  metals  from  West  to 
East  sufhcc  to  keep  prices  in  England  and  America  within  the 
range  preHcribed  by  the  inelastic  metallic  systems  of  Asia  ?  I 
do  not  conceive  that  the  corrective  will  be  adequate  to  this 
end,  and  I  rest  this  conclusion  upon  the  facts  and  principles 
which  I  have  stated,  —  the  vast  proportion  of  the  whole  gold 
production  which  finds  its  way  in  the  first  instance  into  the 
markets  of  England  and  America,  the  comparatively  small 
portion  which  goes  direct  to  the  markets  of  Asia,*  the  highly 
elastic  and  expansible  currencies  of  the  former  countries,  and 
the  extremely  impassive  and  inexpansible  currencies  of  the 
latter. 

We  find,  therefore,  two  sets  of  laws  by  which  the  progress 
of  prices,  or  (which  comes  to  the  same  thing)  the  deprecia- 

1  Accordingly  we  find  that  the  drain  which,  during  tlie  revulsion  of  trade 
following  on  Die  commercial  crisis  of  1867,  had  for  a  while  ceased,  has  with 
the  revival  of  trade,  recommenced.  As  a  proof  how  little  mere  practical  sagacity 
is  to  be  trusted  in  a  question  of  this  kind,  it  may  be  worth  while  to  mention  that, 
only  three  months  since,  mercantile  writers  were  confidently  predicting  Me  han- 
ing  of  the  tide  of  silver  from  the  East  to  England.  The  following  is  from  a  circu- 
lar of  Messrs.  Kllisen  &  Co.,  quoted  in  the  Times  City  article,  July  28,  lb58, 
apparently  with  tlie  editor's  approval :  "  The  time  is  rapidly  approaciiing  when 
silver  will  also  be  shipped  from  here  [China]  to  England."  So  hr  from  thie 
being  the  case,  the  drain  to  the  East  has  again  set  in,  and  gives  every  indica- 
tion of  assuming  its  former  dimensions.  Every  mail  to  India  during  tlie  prei- 
ent  montli  (November,  1858)  has  taken  out  large  amounts  of  silver. 

>  See  ante,  p.  252,  note. 


THE  NEW  OOLD. 


257 


tion  of  fzolij  under  the  action  of  an  increased  supply,  is  ref- 
lated :  first,  those  which  I  explained  in  the  earlier  portion  of 
tiiiti  pajM'i',  which  depend  chiefly  on  the  facility  with  which 
the  supply  of  commodities  can  be  adjusted  to  such  changes  in 
demand  as  the  new  money  expenditure  may  occasion ;  and, 
Hccondly,  tlio»c  which  result  from  the  action  of  the  new  money 
on  the  currencies  into  which  it  is  received.  According  to  the 
former  principle,  the  rise  in  price  follows  the  nature  of  the 
commodity  affected  ;  thus  it  will  in  general  be  greater  in  ani- 
mal tlmn  in  vcgctal)lo  productions  —  in  raw  produce  than  in 
finished  ninnufactures.  According  to  the  latter  principle,  the 
advance  follows  the  economic  conditions  of  the  locality  in 
which  the  commodity  is  produced.  Thus  the  rise  in  price  has 
been  most  rnpid  in  commodities  produced  in  the  gold  coun- 
tries; having  in  these  at  a  single  bound  reached  its  utmost 
limit,  — the  limit  set  by  the  cost  of  procuring  gold.  After 
commodities  produced  in  the  gold  regions,  the  advance  I  con- 
ceive will  proceed  most  rapidly  in  the  productions  of  England 
and  the  United  States ;  after  these,  at  no  great  interval,  in 
the  productions  of  the  continent  of  Eurojjc ;  while  the  com- 
modities the  last  to  feel  the  effects  of  the  new  money,  and 
which  will  advance  most  slowly  under  its  influence,  are  the 
productions  of  India  and  China,  and,  I  may  add,  of  tropical 
countries  generally,  so  far  as  these  share,  as  regards  their 
economic  conditions,  the  general  character  of  the  former 
countries. 

Such  appear  to  be  the  general  principles  according  to  which 
a  depreciation  of  the  precious  metals,  under  the  action  of  an 
increased  supply,  tends  to  establish  itself.  With  a  view  to 
ascertain  how  far,  in  the  progress  of  prices  up  to  the  present 
time  (1858),  any  trace  of  their  operaiiuu  cit;  be  discerned,  I 
have  drawn  up  some  statistical  tables ;  ^  and  although,  from 
the  imperfect  nature  of  the  materials  which  I  have  been  able 
to  collect,  I  cannot  claim  for  the  result  a  complete  verification 
of  the  theoretic  conclusions  which  I  have  ventured  to  ad- 
vance, I  think  they  are  such  as  to  justify  me  in  placing  some 
confidence  in  the  general  soundness  of  those  views.     Before, 

^  See  Cairnes,  Appendix. 
17 


Fi: 


258 


ECONOMIC  HISTORY. 


however,  stating  the  results  of  the  tables,  two  or  three  re- 
marks must  be  premised. 

First,  I  would  crave  attention  to  this  fact,  that  the  jtresent 
time  [1858]  is  one  singularly  free  from  disturbing  influences, 
and  that  such  as  do  exist  are  of  a  kind  rather  to  conceal  than 
exaggerate  the  effects  of  depreciation.  Thus,  we  have  had 
three  harvests  in  succession  of,  I  believe,  more  than  average 
]iroductiveness  (the  last  year  of  deficiency  being  1855);  and 
tnis  cause  of  abundance  has  been  assisted  by  free-trade,  which 
has  opened  our  ports  to  the  produce  of  all  quarters  of  the 
world.  Again,  although  in  the  period  under  review  we  have 
passed  through  a  European  war,  yet  we  have  now  enjoyed  two 
years  and  a  half  of  peace,  during  which,  I  think,  the  economic 
influences  of  the  war  may  be  taken  to  have  exhausted  them- 
selves. It  is  t'lic,  indeed,  that  we  have  an  Indian  revolt  still 
on  our  hands,  besides  having  but  just  concluded  some  hostile 
operations  in  China.  But  these  disturbances  liave  not  been 
of  a  kind  to  interfere  seriously  with  the  general  course  of 
trade,  except  in  some  few  Oriental  commodities  in  which  their 
effects  are  slightly  apparent. 

But  what  renders  the  present  time  peculiarly  important  as 
a  point  of  comparison  with  former  periods,  is  its  being  in  im- 
mediate sequence  to  a  severe  commercial  crisis.  The  elTect 
of  the  crisis  of  last  winter  has  been  effectually  to  eliminate 
one  great  disturbing  element  from  those  causes  to  which  a 
rise  of  price  might  be  attributed,  —  the  element  of  credit. 
Trade  is  now  suffering  depression  in  almost  all  its  branches; 
and  prices,  after  a  period  of  undue  inflation,  have,  through  an 
ordeal  of  bankruptcy,  been  brought  to  the  test  of  real  value. 
In  the  fluctuations  of  commerce  we  have  reached  the  lowest 
point  of  the  wave ;  what.iver,  therefore,  be  the  range  of  prices 
at  the  present  time,  we  may  at  least  be  sure  that  no  commer- 
cial convulsion  is  likely  to  lower  it. 

We  have  further  to  remember  that  in  an  age  like  the  pres- 
ent, in  which  science  and  its  applications  to  the  arts  tire  in  all 
civilized  countries  making  rapid  strides,  there  exists  in  raost 
articles  of  general  consumption  (but  more  particularly  in  the 
more  finished  manufactures)  a  constant  tendency  to  a  decline 


THE  NEW  GOLD. 


259 


of  price,  through  the  employment  of  more  eflficient  machinery 
and  improved  processes  of  production.  Now,  taking  all  these 
circumstances  together,  —  the  propitiousness  of  the  seasons, 
tlic  action  of  free-trade,  the  absence  of  war,  the  contraction  of 
ciodit,  and  the  general  tendency  to  a  reduction  of  cost  pro- 
ceeding from  the  progress  of  knowledge,  —  it  appears  to  mc 
that,  were  tliere  no  other  cause  in  operation,  we  should  have 
reason  to  look  for  a  very  considerable  fall  of  prices  at  the 
present  time,  as  compared  with,  say,  eight  or  ten  years  ago. 
Prices,  however,  as  the  following  tables  ^  will  show,  have  not 
fallen ;  tlicy  have,  on  the  contrary,  very  decidedly  risen,  and 
the  advance  has,  moreover,  as  the  same  tables  will  also  sliow, 
oil  the  whole  proceeded  in  conformity  with  the  principles 
which  I  have  in  this  paper  endeavored  to  establish.  And  this 
is  my  ground  for  asserting  that  the  depreciation  of  our  stan- 
dard money  is  already,  imder  the  action  of  the  new  gold,  an 
accomplished  fact. 


ESSAY  III.  — INTERNATIONAL  RESULTS." 

In  a  former  essay  ^  it  was  attempted,  from  a  review  of  tlie 
iiuhistrial  history  of  Australia  since  the  Late  discovery  of  gold, 
to  make  some  general  deductions  respecting  the  character 
of  that  event,  and  of  its  influence  upon  national  interests. 
Among  other  conclusions  it  was  maintained  that  the  tendency 
of  the  gold  diseoveries,  or,  to  speak  v,'ith  more  precision,  the 
tendency  of  the  increased  production  of  gold,  was  rather  to 
alter  the  distribution  of  real  wealth  in  the  world  than  to 
increase  its  amount ;  the  benofit  derived  by  some  countries 
find  classes  from  the  event  being  for  the  most  part  obtained  at 
the  expense  of  others.  It  was  shown,  for  example,  that  the 
L'ain  to  Australia  and  California  from  their  gold-fields  accrued 
to  them  exclusively  through  their  foreign  trade,  —  their  cheap 
irold  enabling  them  to  command  on  easier  terms  than  for- 
merly all  foreign  productions  ;  while,  on  the  other  hand,  the 
only  result  to  foreign  nations  of  the  traffic  thonco  arising  was 


'  See  Ciiirncs,  Appendicos. 
'  Essay  I.  of  tliis  series. 


2  Fraser's  Magazine,  January,  1800. 


F— r 


260 


ECONOMIC  HISTORY. 


an  increase  in  their  stock  of  money,  —  a  result  rendered  nec- 
essary indeed  by  the  new  conditions  of  raising  gold  introduced 
by  the  gold  discoveries,  but  in  itself  destitute  of  any  real 
ucility.  It  was  shown,  in  short,  that,  as  regards  commercial 
nations,  the  effect  of  the  gold  discoveries  was  to  place  them 
under  the  necessity  of  enlarging  their  currencies,  compellin" 
them  to  pay  for  the  requisite  increase  by  an  increased  export 
of  their  productions. 

To  this  conclusion  I  was  led  Vjy  direct  inference  from  the 
facts  presented  in  the  gold  countries.  In  the  present  paper  it 
is  pi'oposed  to  follow  up  the  inquiry,  with  a  view  to  a  more 
particular  asccrtaiimient  of  the  consequences  formerly  de- 
scribed ;  the  object  being  to  discover  in  what  manner  the  loss 
arising  from  the  gold  movement  is  likely  to  bo  distribiitid 
arafjug  commercial  nations,  and  how  far  this  loss  niny  in  par- 
ticular cases  be  neutralized  or  compensated  by  other  inlluenecs 
which  tlie  same  movement  may  develop. 

In  the  discussions  which  have  hitherto  taken  place  upon 
this  (]nostion,  the  in(iuiry  into  the  consequences  of  tlio  miM 
discoveries  has  l)oon  confinod  almost  exclusively  to  tliiit  as- 
pect of  the  event  in  wliieh  it  is  regarded  as  affectint;'  fiM'd 
contracts  through  a  depreciation  of  the  monetary  staiidiinl,' 
As  so(m  as  the  probability  of  depreeiation  is  seltlcd,  and  tin' 
effe*'ts  of  this  upon  the  different  classes  of  society,  according' 
as  Ibey  happen  to  be  debtors  or  creditors  under  fixed  (mii- 
tracts,  explained,  the  subject  for  the  most  part  is  eimsidind 
as  exhausted.  I  venture,  however,  to  think  that  this  inndi^ 
of  treatm^'nt  is  very  far  from  exhausting  the  (|H('sti(in,  It 
seems  to  me  that,  independently  altogethei-  of  the  existcini' 
of  fixed  contracts,  independently  even  of  gold  Ix'iuii'  a  staiil- 
ard  of  value,  the  increased  production  of  this  niet;il  which  is 
now  taking  place  will  be  attended,  indeed  has  alrtady  lie  ii 

1  See  Stirlinir's  "Hold  Diseoveries  and  their  probnl>le  Consequences;" 
Chevfllicr  "<)n  the  IVol-iMe  Fall  in  tlie  Value  of  Gold;"  r-evMssciir's  emUrilii- 
tions  to  he  "Joiini.il  dcs  KcoiKitnistes,"  1858 ;  MTiillocli's  iiriirlr  "  Trecii  :s 
Metals,"  in  tlio  "  I'licvclojuvdiu  Uriiannica."  In  all  tliese,  itnd  in  many  otiur 
minor  produvtions  oi  the  sntne  sulijeet,  almost  tlie  only  const'iiMcnces  of  I '• 
gold  discoveries  wliicli  are  taken  account  of  are  those  which  occur  in  tixiJ 
contracts  through  a  depreciation  of  the  standard. 


THE  NEW  GOLD. 


261 


attended,  with  very  important  results.     Let  us  observe  for 
a  moment  the  movement  which  is  now  in  progress.     Austra- 
lia and  California  have,  during  the  last  eight  or  ten  years, 
sent  into  general   circulation  some   two  hundred  millions 
storlln*'  of  gold.     Of  this  vast  sura  portions  have  penetrated 
to  the  most  remote  quarters  of  the  world;  but  the  bulk  of 
it  has  boon  received  into  the  currencies  of  Europe  and  the 
United  States  from  which  it  has  largely  displaced  the  silver 
lUrmerly circulating;  the  latter  metal,  as  it  has  become  free, 
tlowinif  off  into  Asia,  where  it  is  permanently  absorbed. 
Viowing  the  effect  as  it  occurs  in  the  mass  of  the  two  metals 
combined,  it  may  be  said  that  the  stream  which  rises  in  the 
"old  regions  of  Australia  and  California  flows  through  the 
cuneneies  of  the  United  States  and  Europe,  and  after  saturat- 
ini:  the  trade  of  these  countries,  finally  loses  itself  in  the 
hoards  of  China  and  Hindostan.     The  tide  which  comes  to 
light  in  the  sands  and  rocks  of  the  auriferous  regions  disap- 
pears in  the  accumulations  of   the  East.     In   conjunction, 
however,  with  this  movement,  there  has  been  a  counter  one. 
V'.th  every  advance  in  the  metallic  tide  a  stream  of  com- 
modities has  set  in  in  the  opposite  direction  along  the  same 
course,  — a  stream  which,  issuing  from  the  ports  of  Europe, 
America,  and  Asia,  and  depositing  as  it  proceeds  a  portion 
of  the  wealth  with  which  it  is  charged,  finds  its  termination 
in  the  markets  of  the  gold  countries.     Here,  then,  we  find  a 
vast  disturbance  in  the  conditions  of  national  wealth,  —  a 
(list    '  ,!nce  originating  in  the  gold  discoveries,  and  result- 
ing in  a  transfer,  on  an  enormous  scale  of  consumable  goods 
—  the  means  of  well-being  —  from  one  side  of  the  globe  to  the 
other.    This  disturbance,  it  is  evident,  is  entirely  independ- 
ent of  the  accident  that  gold  happens  to  be  in  some  countries 
;t  standard  of  value,  as  well  as  of  the  exMstence  of  fixed  money- 
'■'intracts;  for  it  includes  within  the  range  of  its  influence 
immtries  in  which  gold  is  not,  no  less  than  those  in  which 
If  is,  the  monetary  standard;   and  it  affects  alike  persons 
whdse  bargains  are  made  from  day  to  day,  and  those  who 
cui-'asrc  in  contracts  extendi  g  over  centuries.     The  fact  is, 
the  movement  in  question  is  the  result,  not  of  gold's  being  a 


fl'  1 

,            1 

\ 

262 


ECONOMIC  HISTORY. 


standard  of  value,  but  of  its  being  a  source  of  purchasing 
power ;  and  the  influence  of  the  gold  discoveries  having  been 
hitherto  regarded  almost  exclusively  with  reference  to  the 
former  function,  the  vast  effects  which  they  are  producinsr 
through  the  action  of  the  latter,  —  that  is  to  say,  by  alterins 
the  distribution  of  purchasing  power  in  the  world, —have 
been  almost  wholly  overlooked.  It  has  indeed  been  per- 
ceived that  a  great  influx  of  the  precious  metals  is  takin;,' 
place,  accompanied  with  certain  consequences  on  the  trade 
of  the  world;  but  so  far  as  I  know,  beyond  some  general 
phrases  respecting  the  stimulus  given  to  production  by  an 
increase  of  money,  and  the  great  development  of  commerce 
which  it  is  causing,  no  attempt  has  yet  been  made  to  state 
the  principles  by  which  the  movement  is  governed,  or  the 
effects  which  may  flow  from  it.  It  is  to  these  (jucstions, 
then,  that  I  would  now  solicit  the  reader's  attention,  and 
towards  their  solution  the  following  remarks  are  offered 
as  a  contribution. 

Those  who  have  followed  the  course  of  this  controversy  are 
aware  that,  by  most  persons  who  have  taken  part  in  it,  it  has 
been  assumed,  almost  as  an  axiom,  that  no  depreciation  of 
gold  in  consequence  of  the  gold  discoveries  has,  up  to  the 
present  time,  taken  place.*  As  a  matter  of  fact,  however, 
we  know  that  the  gold  prices  of  all  commodities  produced  in 
Australia  and  California  have  risen  in  at  least  a  twofold  pro- 
portion ;2  while  we  have  seen  that  (so  long  as  the  conditions 
of  producing  gold  remain  as  at  present)  this  rise  must  be  per- 
manent. To  express  the  same  thing  differently :  in  the  pur- 
chase of  every  commodity  raised  in  the  gold  countries  two 
sovereigns  are  now  required,  and  (the  above  conditions  being 
fulfilled)  will  continue  to  be  required,  where  one  was  formerly 

1  The  principal  exceptions  to  this  statement  are  M.  Levasscur  (who,  in  an  ar- 
ticle in  the  "  Journal  des  Economistes,"  March,  1858,  cstimat»'s  the  rise  of  pn '■ 
in  France  since  1847  at  20  per  cent  on  all  commodities),  and  Dr.  Soctlxi  ' 
Hamburg,  who,  in  his  table  of  prices  given  m  Iiis  "Contributions  to  tlie  Staiiv 
tics  of  Prices  in  Hamburg,"  arrives  at  a  similar  result  (see  Apjiendix).  Many 
other  writers,  indeed,  acknowledge  that  prices  have  risen,  but  the  rise  is  always 
attributed  to  causes  distinct  from  the  increased  production  uf  gold. 

^  See  Cairnes,  p.  24. 


THE  NEW  GOLD. 


263 


sufficient ;  and  if  this  does  not  amount  to  a  fall  in  the  value 
of  o-old,  I  must  confess  myself  unable  to  understand  the  mean- 
in"  of  that  expression.  It  is  not  to  be  supposs-^d  that  so  re- 
markable a  fact  as  this  should  have  escaped  the  attention  of 
those  who  have  written  on  this  question;  it  seems  to  me 
ratlicr  that  the  ignoring  of  it  in  the  discussion  is  to  be 
attributed  to  a  want  of  definite  ideas  respecting  value  in  the 
precious  metals,  as  well  as  respecting  the  mode  in  which 
chaiiffes  in  their  value  are  accomplished.  The  language 
which  is  cunnnonly  used  on  the  subject  would  seem  to  imply 
that  gohl  and  silver  possess  throughout  the  world  a  uniform 
value,  and  that  all  changes  therein  proceed  in  a  uniform 
manner,  showing  themselves  at  the  same  time  in  all  coun- 
tries, and  in  respect  to  all  commodities.  But  nothing  can 
be  further  from  the  truth  than  such  a  notion.  Gold  and 
silver,  like  all  other  things  which  are  the  subjects  of  inter- 
national exchange,  possess  local  values  ;^  and  it  is  by  a 
succession  of  operations  on  the  local  values  of  gold  of  an 
unequal  and  fluctuating  character  that  its  depreciation  is 
being  effected,  and  that  (the  conditions  of  production  re- 
maining as  at  present)  its  value  will  continue  to  decline. 
Tlic  twofold  rise  of  prices  in  the  gold  countries  forms  the 
first  stoj)  in  this  progress;  and  it  will  be  through  a  series  of 
similar  partial  advances  in  other  countriesi,  and  not  by  any 
general  movement,  that  the  depreciation  of  the  metal 
throu<_fli()ut  the  world  will  be  accomplished,  if  that  consum- 
mation is  indeed  to  take  place.  With  the  question  of  de- 
preciation, however,  I  am  at  present  no  further  concerned 
than  may  he  necessary  to  show  the  bearing  of  these  changes 
in  the  local  values  of  gold  upon  the  movements  of  trade,  and 
thriiugh  these  upon  national  interests. 

There  is  no  need  here  to  resort  to  argument  to  prove  that 
a  general  rise  or  a  general  fall  of  prices,  provided  it  bo 
simultani'Miis  and  uniform,  can  be  attended,  always  exclud- 
ing the  i-ase  of  fixed  inromes  and  contracts  already  entered 

'  See  on  tlic  suliject  of  ti.e  local  values  of  the  precious  metals,  Ricardo's 
"Works,"  pp.  77-80,  and  Mill's  "  Principlfs  of  Political  Economy,"  Book  iii., 
fliaps.  xix.  anil  xxi. 


X 


264 


ECONOMIC  HISTORY. 


into,  with  no  important  consequences  either  to  nations  or  to 
individuals.  It  is  evident  that  such  a  change  would  merely 
alter  the  terms  in  which  transactions  arc  carried  on,  not  the 
transactions  themselves.  But  when  the  rise  or  fall  of  prices 
is  not  general,  in  other  words,  when  the  change  in  the  values 
of  the  precic^us  metals  is  merely  local,  it  will  bo  seen  that 
important  consequences  must  result.  Supposing,  for  exam- 
ple, the  prices  of  all  commodities  produced  in  England  to  be 
doubled,  while  prices  throughout  the  rest  of  the  world  re- 
mained unchanged,  it  is  evident  that  half  the  commodities 
exported  from  England  would,  under  these  circumstances, 
be  suflicient  to  discharge  our  foreign  debts.  With  half  the 
capital  and  labor  now  employed  in  producing  goods  for  the 
foreign  markets,  we  should  attain  the  same  result  as  at  pres- 
ent,—  the  procuring  of  our  imports;  while  the  remaining 
half  would  be  set  free  to  be  applied  to  other  purposes, —to 
the  further  augmentation  of  our  wealth  and  well-being. 
England  would,  therefore,  in  the  case  we  have  supposed,  be 
benefited  in  all  her  foreign  dealings  to  the  full  extent  of  the 
rise  in  price.  On  the  other  hand,  foreign  countries  would, 
in  exchange  for  the  commodities  which  they  send  us,  receive 
in  return  of  our  "ommodities  but  half  their  present  supply. 
Their  labor  and  t  ipital  would  go  but  half  as  far  as  at  pres- 
ent in  command,  ig  our  productions,  and  they  would  be 
losers  in  projjortion.  It  is  evident,  therefore,  that  while 
nations  have  not,  any  more  than  individuals,  any  interest  in 
the  positive  height  which  prices  may  attain,  every  nation,  as 
well  as  every  individual  trader,  is  interested  in  raising.  In 
relation  to  others,  the  price  of  its  own  productions.  The 
lower  the  local  value,  therefore,  of  the  precious  metals  in 
any  country,  the  greater  will  be  the  advantage  to  that  coun- 
try in  foreign  markets. 

This  being  the  manner  in  which  nations  are  interested  in 
changes  in  the  vahw  of  gold,  let  us  now  observe  the  effect 
which  the  gold  discoveries  are  pro*iucing  in  this  respect 
As  has  been  already  stated,  the  local  value  of  gold  in  Aus- 
tralia and  Califo.-nia  has  fallen  to  one-half,  the  prices  of 


THE  NEW  GOLD. 


265 


their  productions  having  risen  in  a  twofold  proportion;*  and 
piicos  in  otlior  i)art8  of  the  world  having  undergone  no  cor- 
rcspumliniT  change,  these  countries  realize  the  position  which 
we  have  just  been  c(Mi8idering  in  our  hypothetical  case.  A 
(riven  qiiiintity  of  their  capital  and  labor  goes  twice  as  far  as 
formerly  in  cunimanding  foreign  productions,  while  a  given 
(immtitv  of  foreign  labor  and  capital  goes  only  one-half  as 
far  in  ouninumding  theirs.  The  world  has  thus,  through  the 
sold  discoveries,  been  placed  in  its  dealings  with  California 
and  Australia  at  a  commercial  disadvantage;  and  from  this 
disadvantage  it  can  only  escape  (always  supposing  the  pres- 
ent conditions  of  producing  gold  to  continue)  by  raising  the 
prices  of  its  productions  in  a  corresponding  degree.  Every 
country,  therefore,  is  interested  in  raising  as  rapidly  as  pos- 
sililc  the  i)rices  of  its  productions,  — in  other  words,  in  the 
most  rapid  possible  depreciation  in  the  local  value  of  its 
gold.2  The  sooner  this  is  effected,  the  sooner  will  the  coun- 
try l)e  rest' red  to  its  natural  commercial  footing  in  relation 
to  Australia  and  California;  while  in  relation  to  countries 
where  prices  do  not  rise  with  the  same  rapidity,  it  will  pos- 
sess the  same  kind  of  advantage  which  is  now  enjoyed  by 
the  gold  countries. 

This  conclusion,  I  find,  is  directly  at  variance  with  the 
opinion  of  some  economists  of  eminence.  Mr.  M'Culloch, 
for  example,  in  his  recent  contribution  to  the  "  Encyclopedia 
Britannica,"  3  niaintains  "that  the  mischievous  influence 
resulting  from  a  fall  in  the  value  of  the  precious  metals  de- 
]it'uils  in  a  great  measure  on  the  rapidity  with  which  it  is 
brought  about."    But  I  apprehend   the  difference    between 

'  Tliis  statement  is  not  given  as  strictly  accurate.  On  the  whole,  the  ad- 
vance of  local  prices  in  the  gold  countries  is  at  present  (1850)  considerably 
more  than  this,  — some  leadi.ig  articles,  as  house-rent,  meat,  etc.,  having  risen  in 
a  fourfold  proportion  and  upwards.  I  adopt  the  proportion  of  two  to  one,  be- 
cause mdiiey  wages  have  risen  in  about  this  ratio,  and  money  wages,  under  a 
acprteiation  of  the  precious  metals,  ultimately  govern  money  prices. 

For  tlic  general  ground  of  this  assertion  the  reader  is  referred  to  Mr.  Mill's 
chapters  on  International  Values,  and  on  Money  as  an  Imported  Commodity, 
in  his  "Priiieiples  of  Political  Econoray,"  also  to  Mr.  Senior's  essay  "On  the 
Cost  of  Obtainitif;  Money." 

^  Artieie  "  Trecious  Metals." 


266 


ECONOMIC  HISTORY. 


Mr.  M'Curioch  and  myself  arises  from  his  attending  exclu- 
sively  to  a  single  class  of  i  i^sequences, — those,  namelv, 
which  result  in  the  case  of  fixed  contracts,  from  a  deprecia- 
tion of  the  standard.  With  respect  to  this  class  of  effects, 
it  is  quite  true  that  the  evils  which  they  involve  will  be 
increased  by  the  rapidity  of  the  depreciation ;  but  as  I  Lave 
shown,  the  new  gold  is  producing  effects  quite  indt'ijondeiitlv 
of  its  operation  upon  fixed  contracts ;  and  it  is  to  those  other 
effects  that  the  statement  I  have  just  made  is  iutonded  to 
apply.  The  distinction  which  I  have  in  view  will  be  best 
exemplified  by  recurring  to  the  experience  of  the  guld  coun- 
tries. In  these  the  value  of  gold  fell  by  more  thiin  50  per 
cent  in  a  single  year,  the  depreciation  involving  a  propor- 
tional loss  to  creditors  with  a  corresponding  gain  to  debtors 
and  entailing  in  addition  those  numerous  incidental  evils 
which  always  result  from  a  sudden  disturbance  of  social 
relations.  No  one,  however,  on  this  account,  will  say  that 
the  sudden  depreciation  of  gold  in  Australia  and  California 
was  not  for  these  countries  a  great  gain.  The  nature  and 
extent  of  that  gain  I  endeavored  on  a  former  occasion  to 
estimate.^  It  consisted,  as  I  showed,  in  the  increased  com- 
mand conferred  by  the  cheapness  of  their  gold  over  mar- 
kets in  which  gold  prices  had  not  proportionally  risen. 
With  every  rise  in  the  price  of  Australian  and  Californian 
products,  or,  what  comes  to  the  same  thing,  with  every  fall 
in  the  local  value  of  their  gold,  their  power  of  purchase  in 
foreign  markets  increased, —  an  increase  of  purchasing  power 
which,  as  we  know,  was  immediately  followed  by  a  sudden 
and  extraordinary  influx  of  foreign  goods.  Now,  precisely 
the  same  principle  applies  in  the  case  of  other  countries.  A 
fall  in  the  value  of  gold  will,  where  gold  is  the  standard. 
lead  to  a  disturbance  in  fixed  contracts,  with  the  concomi- 
tant evils ;  but  it  will  at  the  same  time,  as  in  the  case  just 
considered,  place  the  countries  in  which  it  occurs  in  a  better 
position  commercially  in  the  markets  of  the  world.  Suppos- 
ing, for  example,  a  rise  in  prices  to  take  place  in  all  com- 
mercial countries  equivalent  to  that  which  has  occurred  in 

1  See  Cairnea,  p.  39. 


THE  NEW  GOLD. 


267 


California  and  Australia,  the  consequence  would  be  what  I 
endeavored  to  explain  in  the  paper  just  referred  to;  the 
export  of  gold  from  California  and  Australia,  at  least  on  its 
present  scale,  would  at  once  cease,  and  the  world  would  re- 
ceive instead  an  increased  supply  of  agricultural  and  pastoral 
products,  and  of  other  commodities  which  those  countries 
are  fitted  to  jjroduce,  — a  result  which,  I  ventured  to  think, 
would  be  a  gain  for  the  world.  On  the  other  hand,  suppos- 
ing the  rise  in  price  to  be  confined  to  a  single  country, —  say 
to  England,  —  then  England  would  at  once  be  placed  on  a 
footing  of  commercial  equality  with  California  and  Austra- 
lia, while  as  regards  other  countries  she  would  occupy  the 
same  vantage-ground  which  California  and  Australia  now 
possess.  She  would,  in  short,  obtain  her  gold  at  half  its 
present  cost  (for  she  would  receive  twice  as  much  as  at  pres- 
ent in  return  for  the  same  expenditure  of  labor  and  capital), 
while  the  gold  thus  obtained  would  be  expended  on  foreign 
commodities,  of  which,  according  to  the  hypothesis,  the 
prices  had  not  risen.  Notwithstanding,  therefore,  the  evils 
which  undoubtedly  attend  variations  in  the  standard  of 
value,  more  especially  in  an  old  and  highly  artificial  com- 
uuuiity  like  ours,  it  is  nevertheless,  I  maintain,  for  the  in- 
terest of  every  country,  that,  a  fall  in  the  cost  of  gold  having 
been  effected,  the  progress  of  depreciation  should  in  it  be  as 
rapid  as  possible.  Until  by  a  depreciation  of  gold  corres- 
ponding to  that  which  has  occurred  in  California  and  Aus- 
tralia, the  value  of  that  metal  is  brought  into  harmony  with 
its  cost,  we  must  continue  to  receive  from  those  countries 
little  more  than  a  barren  addition  to  our  stock  of  money. 
But  with  each  successive  step  in  the  progress  of  deprecia- 
tion, there  will  be  for  the  nation  in  which  it  occurs,  a  nearer 
apiiroaeh  to  the  footing  of  commercial  equality  with  the  gold 
countries  from  which  it  has  been  temporarily  displaced, 
while  in  its  dealings  with  other  places  where  the  decline 
has  been  less  rapid,  the  nation  so  circumstanced  will,  during 
the  period  of  transition,  enjoy  a  commercial  superiority. 
As  a  general  conclusion,  therefore,  we  may  say  that  in 
proportion  as  in  any  country  the  local  depreciation  of  gold 


t,  1  ^ 


268 


ECONOMIC  HISTORY. 


I 


is  more  or  less  rapid  than  the  average  rate  elsewhere,  the 
effect  of  the  monetary  disturbance  will  be  for  that  country 
beneficial  or  injurious. 

This  conclusion,  I  may  in  passing  remark,  throws  ligflit 
upon  a  practical  question  of  some  interest  at  tlie  present 
time,  —  I  mean  the  question  of  introducing  a  gold  currency 
into    India.      The  measure    has    been   advocated  by  Mr. 
M'Culloch,  on  the  ground  that,  by  providing  a  new  market 
for  the  increased  supplies  of  gold,  its  effect  would  be  "to 
counteract  that  fall  in  its  value  which  is  so  generally  appre- 
hended."^   There  can  be  no  doubt  that  the   effect  of  tlic 
measure  would  be  what   Mr.   M'Culloch  describes;    but,  if 
the  above  reasoning  be  sound,  this  circumstance,  instead  of 
being  a  reason  for  introdrcing  gold  into  the  currency  of  In- 
dia, affords  {so  far  as  the  interests  of  India  are  coneenicil)  a 
strong  reason   against   the   adoption   of  this   course.    Mr, 
M'Culloch  does  not  state  whether  the  effect  which  he  antici- 
pates upon  the  value  of  gold  would   be  general  or  local; 
whether  extending  over  the  whole  commercial  world  or  con- 
fined to  the  markets  of  India,  —  a  point  of  vital  importance 
in  determining  the  character  of  the  result.    If  the  effect  were 
general, — if  while  counteracting  depreciation  in  India,  it 
influenced  the  value  of  gold  proportionately  in  other  parts 
of  the  world,  —  then  it  must  be  conceded  that  the  result 
would  be  entirely  beneficial.     The  evils  incident  to  a  dis- 
turbance of  fixed  contracts  would  be  avoided,  and  no  others 
would  be  incurred.     But  this  is  just  the  point  which  I  ven- 
ture to  deny.     The  adoption  of  gold  as  the  monetary  stand- 
ard of  India  would  certainly  not  affect  the  local  value  of 
gold  in  Australia  and  California;  for,  as  I  proved  on  a  for- 
mer occasion,  the  value  of  gold  in  these  countries  is  deter- 
mined by  its  cost,  and  its  cost  depends  on  the  productiveness 
of  the  gold-fields.     Nor,  for  reasons  which  w  111  be  hereafter 
stai'-d,  would  it  influence  more  than  in  a  slight  degree  the 
range   of  gold  prices  in  England  and  the  United  States. 
The  operation,  therefore,  of  the  measure  would  be  to  depress 


*  "Encyclopaedia  Britannica,"  article  "  Precious  Metah,"  p.  473. 


THE  NEW  GOLD. 


269 


fr)l(I  prices  in  India,  or  at  least  to  prevent  them  from  rising 
ill  that  quarter  as  rapidly  as  they  otherwise  would;  while  in 
Ciilifornia  and  Australia,  in  England  and  the  United  States, 
it  loft  their  course  substantially  unalTeeted.  Now  this  re- 
sult would  tend  undoubtedly  to  the  advantage  of  California 
ami  Australia,  of  England  and  the  United  States,  but,  as 
it  sooins  to  u»o,  would  as  clearly  be  injurious  to  India.  The 
imrchiisiiii!;  power  of  the  former  countries  over  tho  markets 
of  India  would,  through  the  relative  suj)eriority  of  their 
jiriccH.  1m!  increased,  but  tho  purchasing  power  of  India  over 
<//(,'(>  ma ikets  would,  for  tho  opposite  reason,  be  diminished. 
An  Kniilish  or  American  merchant,  instead  of  discharging 
his  (lil)ts,  as  at  present,  through  tho  medium  of  silver  which 
ho  has  to  purchase  with  gold  at  (S'2d.  per  ounce  (and  may 
soDii  have  to  |)urchase  at  a  higher  rate),  might  discharge  the 
samo  (lol)ts  with  gold  directly;  and  gold  being  by  hypothesis 
more  valuable  in  India  than  before,  the  same  amount  would 
of  course  go  farther.  But  an  Indian  purchaser  of  English  or 
Amcrioau  commodities  would  have  the  same  sum  in  gold  to 
pay  as  if  no  change  had  taken  place  in  the  currency  of  In- 
dia; while  the  gold  prices  of  his  native  productions  being 
lowor,  his  ability  to  pay  would  of  course  be  less.  It  seems 
to  mo,  therefore  (and  the  considerations  hero  adduced  are 
entirely  independent  of  the  reasons  which  exist  on  the  score 
of  good  faith,  — tho  Indian  debt  having  been  contracted  in  a 
silver  currency),  that,  viewing  the  matter  from  the  side  of 
Imliun  interests,  the  introduction  of  a  gold  currency  into 
India  luiist  be  regarded  as  a  measure  decidedly  detrimental.^ 

'  Referring  to  tlie  adoption  of  a  silver  stanrlnnl  oy  Holland  in  1851,  Mr. 
M'CiilloL'li  cluiraL'terizL's  it  as  a  muasuro  "  in  opposition  to  all  sound  principles." 
I  coiifuss  I  am  at  a  loss  to  conjecture  what  sound  principle  was  violated  in  pre- 
firriiig  as  tlio  standard  of  value  that  metal  the  value  of  which  there  was  every 
reason  to  believe  would  be  the  steadier  of  the  two.  [I  may  say  now  (1872) 
that  1  am  disposed  to  assign  much  less  importance  to  this  question  of  a  change 
in  tlic  monetary  standard  of  India  than  I  did  when  the  above  passage  was 
written.  Tiie  reasoning  assumes  the  possibility  of  a  serious  divergence  in  the 
relative  values  of  gold  and  silver;  but  I  now  believe  that  such  a  divergence  is 
pnutiiiiliy  nut  of  the  question,  the  grounds  for  which  opinion  will  be  found 
farther  on  [diirnes,  p.  141].  This  circumstance,  however,  does  not  affect  the  tlieo- 
ritw  iioint  argued  with  Mr.  M'CuUoch.    //  the  exchange  of  the  existing  silver 


" 


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'    'I 


270 


ECONOMIC  HISTORY. 


Returning  once  more  to  the  general  question  we  may  con- 
sider the  following  conclusions  as  established :  Ist,  that  the 
effect  of  the  cheapening  of  gold  upon  commercial  cuuntricii 
being  to  compel  them  to  enlarge  their  metallic  currencies, 
for  which  enlargement  they  must  pay  by  an  export  of  their 
productions,  each  country  will  endure  a  loss  upon  this  head 
to  the  extent  of  the  additional  sum  which  may  bo  rcquigito 
for  each;  and  2dly,  that  while  there  will  be  a  general  loss 
from  this  cause,  yet  the  progress  of  depreciation  over  the 
world  not  being  uniform  or  simultaneous,  the  primary  loss 
may,  through  the  disturbance  in  international  values  thence 
arising  in  particular  cases,  be  compensated  or  even  con- 
verted into  a  positive  gain;  the  loss  or  gain  upon  the  dis- 
turbance being  determined  according  as  the  rise  of  ])riccs  in 
any  country  is  in  advance  or  in  arrear  of  the  general  aveiaire. 
To  ascertain,  therefore,  the  effect  of  the  movement  upon  any 
particular  nation,  we  must  consider  the  manner  in  which, 
in  its  case,  these  two  principles  will  operate. 

With  respect  to  the  first,  I  am  aware  that,  in  speaking  of 
the  loss  imposed  on  a  country  by  the  necessity  of  enlarfrinj: 
its  currency, — by  the  necessity  of  receiving  and  keeping 
increased  supplies  of  gold  and  silver, —  I  am  usin^  language 
which,  notwithstanding  what  was  said  on  a  former  occasion 
in  its  justification,  and  notwithstanding  that  it  is  merely  in 
strict  conformity  with  the  most  elementary  principles  of 
economic  science,  will  still  appear  paradoxical  to  many.  I 
would,  therefore,  before  proceeding  farther  with  this  branch 
of  the  argument,  ask  the  reader  to  consider  the  case  of  a 
private  merchant  who  is  compelled  to  increase  the  stock  of 
cash  with  which  he  carries  on  his  business.  The  metallic 
circulation  of  a  country  performs  in  relation  to  the  com- 
munity functions  precisely  analogous  to  those  which  are  dis- 


ri:-  ;• 
it;i  ^ 


for  a  gold  BtandArd  in  India  were  calculated  to  produce  the  effects  Mr.  M'Cul 
loch  expected  from  it,  the  measure,  it  ttill  teemi  to  ne,  would  be  open  to  the 
objection!  I  have  urged  against  it.  But  I  do  not  believe  that  thecffectiin 
question  would  result ;  and  I  can  well  conceive  that,  having  regard  to  the 
general  convenience  of  commerce,  'the  change  might,  on  the  whole,  be 
advantageous.] 


m- 


THE  NEW  GOLD. 


271 


charged  for  a  merchant  by  his  cash  reserve.  If  a  merchant 
can  safely  dispense  with  a  portion  of  his  ready  cash,  he  is 
enabled,  with  the  money  thus  liberated,  cither  to  add  to  his 
productive  capital  or  to  increase  his  private  expenditure. 
On  the  other  hand,  if  he  finds  it  necessary  to  increase  his 
ri'servo  of  cash,  his  productive  capital  must  be  proportionally 
encroached  upon,  or  his  private  expenditure  proportionally 
curtailed.  And  precisely  the  same  may  be  said  of  the  cur- 
rency of  a  nation.  Where  a  country  docs  not  itself  yield 
gold  or  silver,'  every  increase  of  its  metallic  circulation 
must  be  obtained  —  can  only  be  obtained  —  by  parting  with 
certain  elements  of  real  wealth,  —  elements  which,  but  for 
this  necessity,  might  be  made  conducive  to  its  well-being. 
It  is  in  enabling  a  nation  to  reduce  within  the  narrowest 
limits  this  unproductive  portion  of  its  stock  that  the  chief 
advantage  of  a  good  banking  system  consists;  and  if  the 
augmentation  of  the  metallic  currency  of  a  country  be  not 
an  evil,  then  it  is  difficult  to  see  in  what  way  the  institution 
of  banks  is  a  good.  In  regarding,  therefore,  the  necessity 
imposed  upon  commercial  countries  of  enlarging  their  metal- 
lic currencies  as  injurious  to  their  interests,  I  make  no  as- 
sumption which  is  not  in  perfect  keeping  with  the  best 
known  and  most  generally  recognized  facts  of  commercial 
experience. 

An  increase  in  the  metallic  currency  of  a  country,  then, 
bcini?  an  evil,  let  us  consider  what  the  circumstances  are  by 
which  the  augmentation  renueied  necessary  by  the  gold 
discoveries  will  be  determined.  This,  it  is  evident,  will 
principally  depend  —  the  amount  of  business  to  be  carried  on 
being  given  —  on  the  extent  to  which  substitutes  for  metal- 
lic money  are  in  use;  in  other  words,  on  the  degree  of 
perfection  which  the  banking  system  of  each  country  has 
attained.  To  illustrate  this,  let  us  suppose  a  given  sum  of 
metallic  money,  say  a  million  sterling,  to  be  introduced 

'  Even  where  it  does  yield  these  metals,  the  necessity  of  augmenting  the 
currency  is  not  tlio  lets  an  evil,  since  the  operation  will  occupy,  with  no  result 
t)ut  that  of  avoiding  an  inconvenience,  a  portion  of  the  labor  and  capital  of 
the  country,  which,  but  for  this,  might  hare  contributed  to  its  positiTc  welfare. 


I 


fr^nr 


272 


ECONOMIC  HISTORY. 


into  two  countries  in  which  the  currencies  arc  differcntlv 
constituted, — for  example,  into  England  and  India.  In 
India  coin  is  the  principal  medium  of  circulation  i->  in 
many  parts  the  only  one,  and  consequently  a  million  stcrlin" 
introduced  into  the  currency  of  India  would  represent  cnlv 
an  equal,  or  little  more  than  an  equal,  addition  to  its  total 
medium  of  circulation, — to  the  whole  monetary  machineiv 
by  which  the  exchange  of  commodities  is  effected  and  prices 
maintained.  But  in  England,  where  the  currency  is  differ- 
ently constituted,  the  result  would  be  different.  The  groat 
bulk  of  the  circulating  medium  of  this  country  consists  of 

1  [The  reader  will  bear  in  mind  that  this  was  written  in  18Q9.  Tlit  state  of 
the  Indian  currency  at  that  time  may  lie  gathered  from  tlie  following  cxtraits 
from  a  paper  on  "  Tlie  Trade  and  Commerce  of  India,"  read  before  the  Britiih 
Association  in  1850.]  "  Intimately  connected  with  Indian  trade  and  commerce 
is  a  sound  system  of  banking.  At  present  there  are  only  three  banks  of  impor- 
tance in  India,  —  the  banks  of  Bengal,  Bombay,  and  Madras.  These  have  no 
branches,  the  absence  of  wliich  constitutes  one  of  the  ninin  defects  of  the  ivt- 
tern.  Tlie  few  otlier  banks  in  India  do  not  issue  notes,  and  employ  their  capi- 
tal in  making  advances  on  bills  of  lading,  in  exchange  operations,  and  in  some 
instances  in  loans  to  members  of  the  Service,  at  high  rates  of  interest ;  but 
afford  no  banking  facilities  for  conducting  the  internal  trade  of  the  countrr." 
The  writer  then  refers  to  a  table,  showing  the  state  of  the  three  leadini;  Imnlii 
(Bengal,  Bombay,  and  Madras)  In  the  preceding  June,  from  which  it  appesn 
that  the  bullion  at  that  time  in  the  coffers  of  the  banks  wns  m  rrr^Mnf  the 
notes  in  circulation,  the  amount  of  these  latter  being,  for  the  wliole  of  Irnlis, 
£2,241,471,  or  about  one-tenth  of  the  amount  issued  by  the  Bunk  of  England 
alone;  while  the  total  amount  of  "accounts  current"  was  only  £1,855,000,- 
about  one-sixth  of  those  lield  by  some  of  the  private  banks  of  London,  and  not 
one-flfteentli  of  those  of  the  Bank  of  England.  The  total  amount  of  commer- 
cial bills  discounted  in  these  three  leading  banks  of  India  is  set  down  at  i2i8,- 
000 !  "  And  this,"  it  is  observed,  "  in  a  country  where  the  gross  annual  revenue 
is  .£.34,000,000;  the  export  trade,  on  an  average  of  the  last  five  years,  £24.000- 
000;  the  import  trade,  on  the  same  average,  £28,000,000,  with  an  internal  trade 
to  an  extent  almost  impossible  to  estimate."  ("The  Trade  and  Coromcne of 
India,"  by  J.  T.  Mackenzie,  read  before  the  British  Association,  1851>,  pp  15. 
16.)  In  the  evidence  taken  before  the  late  Committee  "On  Colonization  and 
Settlement  in  India,"  Mr.  Alexander  Forbes,  when  questioned  with  reference  to 
the  large  absorption  of  silver  in  India,  expressed  his  opinion  that  the  silver  m 
all  required  for  current  coin.  "  It  has  often  been  said  that  the  natives  lioard 
silver.  Now  my  experience  is  that  they  do  not  hoard  silver;  they  hoard  gold; 
and  that  the  sliver  is  actually  required  for  the  commerce  of  the  country."  And 
this  he  traces  (Answers  2,222,2,223,2,372-80)  to  the  want  of  banking  accom- 
modation and  the  imperfect  means  of  communication  generally  in  the  country. 
See  also  the  evidence  of  Mr.  Mangles  (Answers  1,625-1,633). 


b:  ,  . .  •j.x 


#t;-j: 


THE  NEW  GOLD. 


273 


certain  forms  of  credit;  and  the  amount  of  these  credit 
media  standing  in  a  certain  large  proportion  to  the  coin  in 
the  country,  the  effect  of  introducing  a  milliun  sterling  into 
our  currency  would  be  to  increase  the  medium  of  circulation 
bv  an  amount  very  much  greater  than  that  of  the  added  coin. 
Let  us  consider  for  a  moment  what  becomes  of  a  sum  of  coin 
or  bullion  received  into  England.  I  do  not  now  speak  of 
that  moving  m<iss  of  metal  which  passes  (so  to  speak)  through 
the  currency  of  the  country, — which,  received  to-day  into 
the  vaults  of  the  Bank  of  England,  is  withdrawn  to-morrow 
for  foreign  remittance, — but  of  gold  which  is  permanently 
retained  to  meet  our  genuine  monetary  requirements.  Of 
such  gold  a  portion,  greater  or  less,  according  to  circum- 
stances, will  always  find  its  way  into  the  channels  of  retail 
trade ;  and  so  far  as  it  follows  this  course,  its  effect  in  aug- 
menting the  circulation  will  be,  as  in  India,  only  to  the 
extent  of  its  actual  amount.  But  a  portion  will  also  be 
received  into  the  banks  of  the  country,  where,  either  in  the 
form  of  coin,  or  of  notes  issued  against  coin,  it  will  consti- 
tute an  addition  to  their  cash  reserves.  The  disposable  cash 
of  the  banks  being  thus  increased,  an  increase  of  credit 
operations  throughout  the  country  would  in  due  time  follow. 
Tne  new  coin  would  become  the  foundation  of  new  credit 
advances,  against  which  new  checks  would  be  drawn,  and  new 
bills  of  exchange  put  in  circulation,  and  the  result  would  be 
an  expansion  of  the  whole  circulating  medium  greatly  in 
excess  of  the  sum  of  coin  by  which  the  new  media  were 
supponed.  Now,  credit,  whatever  be  the  form  which  it 
assumes,  so  long  as  it  is  credit,  will  operate  in  purchases, 
and  affect  prices  in  precisely  the  same  way  as  if  it  were 
actually  the  coin  which  it  represents.  So  far  forth,  there- 
tore,  as  the  new  money  enables  the  country  to  support  an 
increase  of  such  credit  media, — to  support  them,  I  mean,  by 
cash  payments,  — so  far  it  extends  the  means  of  sustaining 
sold  prices  in  the  country;  and  this  extension  of  the  cir- 
culating medium  being  much  greater  than  in  proportion  to 
the  amount  of  added  coin,  the  means  of  sustaining  gold 
prices  will  be  in  the  same  degree  increased.     Thus,  suppos- 

18 


274 


ECONOMIC  HISTORY. 


ing  the  ratio  of  the  credit  to  the  coin  circulation  of  the 
country  to  be  as  four  to  one  (and  the  proportion  is  greatly  in 
excess  of  this),  the  addition  of  one  million  sterling  of  coin 
would  be  equivalent  to  an  increase  in  the  aggregate  circula- 
tion of  four  millions  sterling,*  and  one  million  sterling  of 
gold  would  consequently,  in  England,  for  a  given  extent  of 
business,  support  the  same  advance  in  gold  prices  as  four 
times  that  amount  in  India.  It  follows  from  these  consid- 
erations, that  in  order  to  raise  prices  throughout  a  given 
range  of  transactions  to  any  required  level,  the  quantity  of 
metallic  money  which  will  be  necessary  will  vary  in  differ- 
ent countries,  according  to  the  constitution  of  their  curren- 
cies; the  requirements  of  each  increasing  generally  in  an 
inverse  ratio  with  the  efficiency  of  its  banking  institutions. 
We  may  thus  see  how  very  unequal  will  be  the  operation 
of  the  gold  discoveries  with  respect  to  commercial  com- 
munities. The  reduction  in  the  cost  of  gold  to  which  they 
have  led  has,  as  we  have  seen,  produced  in  the  gold  countries 
a  twofold  rise  of  gold  prices ;  and  supposing  the  present  con- 
ditions of  raising  gold  to  continue,  the  same  cause  must 
ultimately  lead  to  the  same  result  throughout  the  world, 
imposing  upon  each  country  the  n  cessity  of  so  enlarging 
its  currency  as  to  admit  of  this  advance.  But  we  hare 
seen  that  the  quantity  requisite  for  this  purpose  varies  ac- 
cording to  the  monetary  status  of  the  country  for  which  it  is 
required ;  and  inasmuch  as  the  new  money  must  be  paid  for 
by  commodities,  the  abstraction  of  commodities,  and  there- 
fore the  loss  of  the  means  of  well-being,  to  which  each  coun- 
try must  submit,  will  vary  with  the  same  circumstance.    On 


■  ■ 

1 

*  Strictly  spcakinft,  this  conclusion  would  not  follow  on  the  above  §uppoii- 
tion,  the  efficiency  of  different  forms  of  credit  in  performing  the  woric  of  circu- 
lation being  (as  pointed  out  by  Mr.  Mill,  "Principles  of  Politicai  Economy," 
vol.  ii.,  pp.  68-61)  different,  and  only  some  of  them  being  in  this  reipect  equal 
to  coin.  But  such  distinctions  do  not  affect  the  general  truth  of  tiie  principle 
contended  for  in  tlie  text,  that  the  necessity  for  coin  varies  inversely  witli  tlie 
use  of  credit.  Besides,  as  I  intimated,  the  proportion  of  credit  to  coin  in  our 
circulation  is  much  greater  than  I  have,  assumed ;  and  a  miilion  of  coin  taken 
into  our  currency  would  really  be  equivalent  to  more  than  four  millions  added 
to  a  purely  metallic  one. 


THE  NEW  GOLD. 


275 


the  supposition,  therefw'e,  on  which  we  are  arguing,  the 
quantity  of  new  money  which  England  would  require  would 
be,  when  compared  with  the  extent  of  her  business,  ex- 
tremely smull,  and  her  loss  of  real  wealth  small  proportion- 
ally. The  same  would  be  true  of  the  United  States,  where 
credit  institutions  have  also  attained  a  high  Qegree  of 
efficiency,  and  whose  paper  consequently  forms  a  large  pro- 
portion of  the  whole  circulation.  In  France,  the  use  of 
credit  being  more  restricted,  the  requirements  for  coin 
would  be  greater,  and  consequently  also  the  loss  of  consum- 
able commodities ;  while  in  India  and  China,  and  indeed  in 
Asiatic  communities  generally,  the  circulating  medium  be- 
ing almost  purely  metallic,  the  requirements  for  coin  would, 
in  proportion  to  the  business  in  which  it  was  employed, 
attain  their  maximum,  with  a  corresponding  maximum  of 
loss  in  the  elements  of  well-being.* 

The  operation  of  this  principle  is  indeed,  in  the  actual 
circumstances  of  the  world,  in  some  degree  concealed  by  the 
complex  conditions  under  which  it  comes  into  play.  Thus 
Great  Britain  and  the  United  States,  instead  of  obtaining 
the  smallest  shares,  receive  in  the  first  instance  nearly  the 
whole  of  the  new  gold.  On  the  other  hand,  the  quantity 
which  goes  to  India  and  China  from  the  gold  countries  is 
comparatively  trifling;'  and  although  a  large  drain  of  treas- 
ure has  set  in  thither  from  Europe,  yet  this  consists  chiefly 
of  silver.     If,  however,   passing   by  the   accidents   of  the 

'  It  is  curious  to  observe  the  contradictions  in  which  persons  are  involved 
who,  Mill  under  the  influence  of  tlie  mercantile  theory  of  wealtli  (and  there  are 
few  even  among  professed  economists  who  are  free  from  its  influence),  anj 
nevertheless  sensible  from  experience  of  the  advantages  of  a  system  with  which 
it  is  incompatible.  Thus  several  witnesses  before  the  late  Committee  on  Indian 
Colonization  refer  to  the  large  influx  of  silver  into  India  in  recent  years  as  a  sure 
indication  of  the  increasing  prosperity  of  that  country  ;  yet,  almost  In  the  same 
breath,  they  speak  of  the  deficiency  of  banking  accommodation  as  among  its 
most  pressing  wants.  Now,  it  is  certain  that,  just  in  proportion  as  banking  ac- 
commodation is  extended,  the  absorption  of  silver  by  India  will  decline ;  whence 
it  would  follow,  if  the  reasoning  of  the  witnesses  be  sound,  that  the  effect  of 
the  extension  of  banks  would  l)e  to  chock  the  growing  prosperity  of  the  coun- 
trr   See  "Minutes  of  Evidence,"  Questions  1.625-1,633;  2,221-2,223. 

This  order  in  the  diffusion  of  the  new  gold  iias  not  been  susUined.    See 
«"'«.  p.  262,  note. 


r 


'in    • 

Ifrt. 


\% 


*:!: 


Hi 

276 


ECONOMIC  HISTORY. 


movement,  we  attend  to  its  essentials  we  shall  find  that  the 
results  are  entirely  conformable  to  the  principle  I  have  en- 
deavored to  describe.  For  though  the  bulk  of  the  now  golJ 
comes  in  the  first  instance  to  England  and  the  United  States, 

—  determined  thither  by  the  course  of  international  demand, 

—  yet  Eifj^land  and  the  United  States  do  not  form  its  ulti- 
mate destination.  The  monetary  requirements  of  these  coun- 
tries being  easily  satisfied,  the  mass  of  the  metal  on  reaching 
these  markets  becomes  immediately  disposable  for  foreign 
purchases,  by  which  means  the  United  States  and  Enfrlanil  arc 
enabled  to  transfer  to  other  countries  this  unprofitable  stocic, 
the  commodities  with  which  in  the  first  instance  they  parted 
being  replaced  by  others  which  they  more  require.  So  also, 
although  the  metallic  drain  to  the  East  is  composed  princi- 
pally of  silver,  the  efflux,  at  least  in  its  present  projjortions, 
is  not  the  less  certainly  the  consequence  of  the  increased  pro- 
duction of  gold,  for  the  silver  of  which  it  consists  has  been 
displaced  from  the  currencies  of  Europe  and  America  bv  the 
gold  of  Australia  and  California;  and  the  drain  to  the  East  is 
only  not  a  golden  one,  because  silver  alone  is  in  that  region 
the  recognized  standard.  As  the  final  result  of  the  whole 
movement,  we  find  that,  while  the  metallic  systems  of  Eni'- 
land  and  the  United  States  are  receiving  but  small  perma- 
nent accessions,  those  of  India  and  China  are  absorbin;,' 
enormous  supplies.  The  former  countries,  though  the  first 
recipients  of  the  treasure,  yet,  not  requiring  it  for  donustic 
purposes,  are  enabled  to  shift  the  burden  to  others,  whose 
real  wealth  they  command  in  exchange,  while  the  latter, 
requiring  what  they  receive,  are  compelled  to  retain  it. 
Having  parted  with  their  commodities  for  the  new  money, 
they  are  unable  afterwards  to  replace  them.  As  their  stock 
of  coin  increases,  their  means  of  well-being  decline,  and 
they  become  the  permanent  victims  of  the  monetary 
disturbance. 

But,  secondly,  we  conclude  that  the  loss  of  real  wealth 
resulting  from  the  augmentation  of  their  currencies  would 
in  particular  countries  be  compensated,  and  might  in  some 
be  even  converted  into  positive  gain,  by  the  disturbance 


y;||(|j|!  Ji.;  }i_ 


THE  NEW  GOLD. 


277 


which,  during  the  period  of  transition,  would  take  place  in 
international  values.  As  has  been  already  remarked,  a 
general  rise  of  prices  in  all  countries,  if  simultaneous  and 
uniform,  since  it  leaves  the  proportions  in  which  commod- 
ities arc  exchanged  undisturbed,  leads  to  no  change  in  inter- 
national values,  and  produces  no  effect  upon  national  inter- 
ests. But  where  prices  rise  unequally,  international  values, 
and  through  these,  national  interests  are  affected.  We  have 
therefore  to  consider  how  far,  in  the  actual  circumstances  of 
the  world,  a  rise  of  prices  in  particular  countries,  unaccom- 
panied by  a  corresponding  advance  in  others,  is  possible, 
and,  in  so  far  as  it  is  possible,  in  what  order  the  several 
changes  may  be  expected  to  occur. 

As  regards  the  question  of  possibility,  this  is  placed  be- 
yond controversy  by  the  example  of  California  and  Austra- 
lia. It  is  a  matter  of  fact  that  prices  in  those  regions  have 
advanced  in  a  twofold  proportion,  while  no  corresponding 
rise  of  prices  has  occurred  throughout  the  world.  The  cir- 
cumstances, however,  of  the  gold  countries  will  probably  be 
thought  of  too  exceptional  a  character  to  form  the  basis  of 
any  general  conclusion ;  and  it  will  therefore  be  desirable  to 
advert  for  a  moment  to  the  causes  which  produced  in  Cali- 
fornia and  Australia  that  local  elevation  of  price,  with  a 
view  to  consider  how  far  the  same  conditions  are  capable  of 
being  realized  elsewhere. 

These  causes,  as  was  formerly  shown,*  were  the  special 
facilities  for  producing  gold  enjoyed  by  California  and  Aus- 
tralia, combined  with  the  limited  range  of  their  domestic 
transactions.  The  sudden  cheapening  of  gold,  involving  a 
corresponding  increase  in  money  earnings,  placed  an  extra- 
ordinary premium  on  the  production  of  the  metal,  while  the 
limited  range  of  their  domestic  trade  rendered  the  necessary 
enlargement  of  their  monetary  systems  an  easy  task.  On 
the  other  hand,  the  immense  extent  of  the  aggregate  com- 
merce of  the  world  required,  in  order  to  secure  a  similar 
advance,  a  proportional  increase  in  its  aggregate  stock  of 


*  See  Caimes,  pp.  25,  26. 


278 


ECONOMIC  HISTORY. 


•! ,' 


monoy,  an  augmentation  which  could  only  be  accomplighed 
after  the  lapse  of  a  considerable  time.  Prices  therefore  rose 
rapidly  in  the  gold  countries,  while  over  the  area  of  general 
commerce  the  rise  had  been  but  slow. 

Such  being  the  circumstances  which  produced  the  local 
divergence  of  prices  to  which  I  have  called  attention,  it  will 
at  once  be  seen  that  of  the  two  conditions  which  I  liavo 
stated,  the  latter  —  the  necessary  enlargement  of  the  local 
currency  —  may  in  most  countries,  though  not  in  all  at  the 
same  time,  be  fulfilled,  if  not  with  the  same  rapidity  as  in 
Australia  and  California,  still  after  no  very  long  delay.  It 
has  been  computed,*  for  example,  that  the  total  quantity 
of  gold  coin  circulating  in  Great  Britain  amounts  to 
£75,000,000  sterling.  Assuming  this  to  be  correct,  it 
would  follow  (all  other  conditions  being  supposed  identical) 
that  an  addition  of  £75,000,000  would  be  sufllicicnt  to  effect 
an  elevation  of  our  local  prices  equivalent  to  that  which  \m 
occurred  in  Australia.  Now  at  the  present  rate  of  produc- 
tion, the  quantity  of  gold  which  arrives  annually  in  Circat 
Britain  cannot  fall  much  short  of  £30,000,000  stcrlinfr;^  so 
that  were  we  merely  to  retain  all  that  we  receive,  we  should 
at  the  end  of  two  years  and  a  half  be  in  a  position,  so  far  as 
the  augmentation  of  our  currency  is  concerned,  to  maintain 
the  same  advance  in  price  as  has  occurred  in  the  gold  coun- 
tries. If,  then,  prices  in  Great  Britain  have  not  risen  in 
the  same  degree,  the  result,  it  is  evident,  cannot  be  due  to 
the  difficulty  of  procuring  the  supply  of  gold  necessary 
for  the  enlargement  of  our  currency.  It  remains,  tliercforo, 
to  be  considered  how  far  those  special  facilities  for  jjrocurinL' 
gold  which  have  operated  in  the  gold  countries  may  conic 
into  play  in  other  parts  of  the  world. 

The  extraordinary  facilities  for  procuring  gold  enjovcd 

»  "  History  of  Prices,"  vol.  vi.,  App.  xxii.  This  also  is  Mr.  M'Culioch'je^ 
thnate :  "  Enuyclopasdia  Britannica,"  article  "  Precious  Metals,"  p.  465.  [It 
will  be  borne  in  mind  that  these  estimates  apply  to  tlie  ^noA  immediatelf 
preceding  the  first  publication  of  these  Essays  (1850-60).] 

a  (£20,000,000  would  have  been  nearer  the  mark,  but  at  the  time  this  paper 
was  written  no  trustworthy  statistics  of  gold  imports  existed.  Eitlier  ainouni, 
however,  answers  equally  well  the  purpose  of  the  argument  (1872)] 


m 


THE  NEW  GOLD. 


27y 


by  Australia  and  California  depend,  of  course,  on  the  po88es< 
gion  of  their  gold  mines ;  and  this  being  so,  it  might  seem 
aa  if  all  countries,  not  being  like  them  auriferous,  were  by 
the  nature  of  the  case  precluded  from  fulfilling  this  condition 
of  the  ])roblcm;  but  this  by  no  means  necessarily  follows, 
as  will  be  evident  if  we  reflect  that  there  are  other  modes  of 
obtaining!:  gold  than  by  direct  production,  of  which  modes 
the  effieii'iicy  enjoyed  by  different  countries  dilfcrs  almost 
as  much  as  the  degrees  of  fertility  in  different  gold  mines. 
Where  countries  do  not  themselves  produce  gold,  the  mode 
by  which  they  obtain  it  is  through  their  foreign  trade. 
Xow,  it  is  a  fact  well  known  to  economists  *  that,  with  refer- 
ence to  the  cost  of  commodities  the  terms  on  which  foreign 
trade  is  carried  on  differ  greatly  in  different  countries,  the 
labor  of  suinc  going  much  farther  in  commanding  foreign 
productions  than  that  of  others.  According,  however,  to 
the  conditions  on  which  foreign  productions  generally  are 
obtainable,  will  bo  those  on  which  gold  may  be  obtained. 
If  a  country  possess  special  facilities  for  supplying  markets 
where  gold  can  be  given  in  exchange,  it  will  obtain  its  gold 
more  cheaply,  at  a  less  sacrifice  of  labor  and  capital,  than 
countries  which  do  not  share  these  facilities;  and  among 
such  countries  it  will  therefore  occupy  precisely  the  same 
position  as  an  auriferous  country  whose  mines  are  of  more 
than  the  usual  richness  among  the  countries  which  yield 
sold.  It  is  thus  possible  for  a  non-auriferous,  no  less  than 
for  an  auriferous  country,  to  possess  exceptional  facilities  in 
tlie  means  of  procuring  gold,  and  therefore  to  fulfil  the  sec- 
ond of  the  conditions  by  which  a  divergence  of  local  prices 
from  tlie  ordinary  level  of  the  world  may  bo  effected. 

Now  it  appears  to  me  there  are  two  countries  which  pos- 
sess in  an  eminent  degree  the  qualifications  requisite  for 
attaining  this  result,  I  mean  Great  Britain  and  the  United 
"States,  the  former,  as  being  par  excellence  the  great  manu- 
facturer among  civilized  nations, — the  manufacturer  more 

'  Sec  Ricardo's  "  Works,"  chap,  vii.,  on  Foreign  Trade.  Mill's  "  Principles 
of  Pulitical  Economy,"  chaps,  zvii.,  xiz.    Also,  Senior's  Essay,  "  On  the  Cost 

of  Obtaining  Money." 


280 


ECONOMIC  HISTORY. 


I 


particularly  of  descriptions  of  goods,  —  af  cotton,  woollen, 
linon,  and  iron,  which  enter  largely  into  the  cun8uui|)ti(m  of 
the  classes  by  whom  chiefly  the  gold  countries  are  iHuplod; 
and  the  latter,  as  the  principal  producer  of  raw  niutuiiul,  bh 
well  as  of  certain  commodities, — as  grain,  tolmcco,  sugar, 
and  rice,  —  which  are  also  largely  consumed  by  the  same 
classes.  In  these  circumstances  Great  Britain  and  thu  Unit  d 
States  enjoy  peculiar  advantages  in  the  markets  uf  the  gold 
countries,  and  these  advantages  are  extended  and  coafirmed 
by  other  important  incidents  of  their  position.  Tiiiia  tlu'y 
possess  the  greatest  mercantile  marine  in  the  world,  liy  which 
they  arc  enabled  to  give  the  fullest  scope  to  their  inaimfac- 
turing  and  agricultural  superiority,  while  by  race,  lunguugc, 
and  religion  they  arc  intimately  connected  with  the  iiroilui- 
ers  of  the  new  gold,  — a  connection  frc.n  which  spring  ties, 
moral,  social,  and  political,  to  strengthen  and  secure  those 
which  commerce  creates.  Great  Britain  and  the  United 
States  thus  possess  in  their  foreign  trade  a  rieh  mine,' 
worked  by  their  manufacturers,  planters,  and  farmers,  tended 
by  their  mercantile  marine,  and  protected  by  their  naval 
power,  —  a  mine  by  means  of  which  they  are  enabled  to  ob- 
tain their  gold  on  terms  more  favorable  than  other  nations. 
The  effect  of  this  in  ordinary  times  is  shown  by  a  seale  of 
money  rates,  wages,  salaries,  and  incomes,  permanently 
higher  than  that  which  elsewhere  prevails;  but  in  times  of 
monetary  disturbance  like  the  present,  when  the  eost  of 
gold  having  been  reduced  its  value  is  falling,  these  advan- 
tages, it  seems  to  me,  must  tell,  as  analogous  advantages 
have  told  in  the  gold  countries,  in  a  more  rapid  realization 
of  the  results  which  are  in  store,  —  in  a  quicker  ascent 
towards  that  higher  level  of  prices  and  income  which  the 
cheapened  cost  of  gold  is  destined  ultimately  to  produce. 
There  is  reason,  therefore,  on  considerations  of  theory,  to 
expect  a  repetition  in  England  and  America  of  that  phe- 

»  The  mine  worked  by  England  is  the  general  market  of  the  world ;  the 
miners  are  those  who  produce  those  commodities  by  tlie  exportation  of  which 
the  precious  metals  are  obUIned.  —  Sbniob'b  Essay  "  On  the  Cost  of  Obtaining 
Money,"  p.  16. 


THE  NEW  GOLD. 


281 


iiomcnon  which  haft  been  already  exhibited  in  Australia  and 
California, — a  divergence  of  local  money-rates  from  the 
arerup*  lovel  of  surromiding  countries.  On  a  future  occa- 
sion i  Hliall  endeavor  to  ascertain  how  far,  in  the  case  of 
(iri'iit  Britain,  these  a  priori  conclusions  are  supported  by 
factH,  —  linw  fur  prices  and  incomes  have  here,  under  the 
intlueiu'u  of  the  gold  discoveries,  outstripped  the  correspond- 
in;;  niovonu'ut  in  other  countries.'  Having  settled  this 
point,  wc  shall  be  in  a  position  to  form  u  general  estimate  of 
the  bcnolit  which  may  thence  accrue  to  us.  Meanwhile, 
however,  I  may  in  conclusion  point  out  the  mode  in  which 
the  advanta^M's  incident  to  the  monetary  position  we  shall 
occuiiy  arc  likely  to  bo  realized. 

Antl  hero  it  may  be  well  to  call  the  reader's  attention  to 
the  distinction,  sometimes  overlooked,  between  u  full  in  the 
value  uf  ;;old  and  a  rise  in  the  price  of  commodities.  A  rise 
iu  the  price  of  commodities  if  general,  implies  commonly  a 
fall  in  the  value  of  money;  but,  according  to  the  ordinary 
use  of  langua<i;c,  alike  by  economists  and  common  speech, 
money  woiiltl,  I  apprehend,  in  certain  circumstances,  be  said 
to  have  fallen  in  value,  even  though  the  prices  of  largo 
classes  of  connnodities  remain  unaffected.  For  example, 
suppitsinj^  improvements  to  have  been  effected  in  some 
l)runcli  of  pntduction  resulting  in  a  diminished  cost  of  the 
commodity,  the  value  of  money  remaining  the  same,  prices 
would  fall ;  if  under  such  circumstances  prices  did  not  fall, 
that  could  only  be  because  money  had  not  remained  the 
same,  but  had  fallen  in  value.  The  continuance  of  prices 
unaltered  would,  therefore,  under  such  circumstances,  amount 
to  proof  of  a  fall  in  the  value  of  gold.  Now,  v^i  n  in  con- 
ui'ction  with  this  consideration,  we  take  account  of  the  fact 

'  [Some  evidence  on  the  point  will  be  found  in  the  Appendix  (see  Cairnes) ; 
bat  the  inquiry  iiere  contemplated  wag  never  carried  into  effect.  A  very  inter- 
MUng  and  carefully  prepared  paper  on  the  subject,  however,  was  read  some 
ye»r8  later  by  my  friend  Professor  Jevons,  before  the  London  Statistical  Society, 
when  I  )iad  tlie  satisfaction  to  And  that  the  result*  of  his  entirely  independent 
inteitigations  to  a  very  large  extent  corroborated  the  conclusions  at  which  I 
•"d  srrived,  mainly  by  way  of  deduction  from  the  general  principles  of  the 
Kieoce.] 


282 


ECONOMIC  HISTORY. 


Im:  ;• 


that  over  the  greater  portion  of  the  field  of  British  industry 
improvement  is  constantly  taking  place,  it  is  obvious  that 
the  mere  movements  of  prices  here,  taken  without  reference 
to  the  conditions  of  production,  are  no  sure  criteron  of 
changes  in  tho  value  of  gold. 

The  truth  is,  in  a  large  class  of  commodities,  in  all  those 
to  which  mechanical  or  chemical  inventions  arc  cxtcnsirelv 
applicable,  even  on  the  supposition  of  a  very  great  deprecia- 
tion of  gold,  no  considerable  advance  in  price  is  probable. 
Gold,  for  example,  might  have  fallen  since  the  bcf,'iuning  of 
the  present  century  to  the  extent  of  75  per  cent,  that  is  to 
say,  four  sovereigns  now  might  be  equal  to  no  more  than 
one  sovereign  at  the  commencement  of  the  period,  and  yet 
in  a  large  class  of  manufactured  goods  no  advance  in  price 
would  be  apparent,  the  reduction  in  the  cost  of  production 
being  in  more  than  an  equal  proportion.  In  ordinary  times 
agricultural  operations  escape  in  a  great  degree  the  influence 
of  industrial  progress ;  but  within  the  last  ten  years,  that  is 
to  say,  since  the  repeal  of  the  Corn  Laws,  which  nearly 
synchronized  with  the  gold  discoveries, — the  spirit  of  im- 
provement has  been  as  busy  in  agriculture  as  in  any  other 
department  of  industry,  and  in  conjunction  with  importa- 
tions from  foreign  countries  has  acted,  and  must  for  some 
time  at  least  continue  to  act  powerfully  upon  the  price  of  raw 
products  in  this  country. 

The  depreciation  of  gold,  therefore,  may  be  realized  either 
in  a  corresponding  advance  of  prices,  or  in  the  neutraliza- 
tion of  a  fall  which,  in  the  absence  of  depreciation,  would 
have  occurred ;  but  in  whatever  form  it  may  come  to  us,  our 
gain  or  loss  as  a  nation  will  be  the  same,  and  will  depend 
upon  the  condition  I  have  stated,  —  the  more  or  less  rapid 
depreciation  of  our  currency  as  compared  with  the  curren- 
cies (convertible,  like  ours,  into  gold)  of  other  countries. 
Whether,  the  conditions  of  production  remaining  unaltered, 
the  depreciation  be  indicated  by  a  corresponding  advance  of 
prices,  or,  those  conditions  undergoing  improvement,  the 
fall  in  the  value  of  gold  merely  operates  in  neutralizing,  as 
regards  price,  the  effects  of  the  cheapened  cost  of  commodi* 


THE  NEW  GOLD. 


283 


tiea in  either  case  the  gold  price  of  the  products  of  English 

labor  and  ahtinence  will  rise.  A  given  exertion  of  English 
industry  will  reap  a  larger  gold  reward  than  before;  and 
foreign  commodities  not  rising  in  price  in  the  same  degree, 
the  larger  gold  reward  will  indicate,  over  ao  much  of  our 
expenditure  as  is  directed  to  foreign  productions,  a  real  aug- 
mentation of  well-being.  As  regards  that  portion  of  our 
expenditure  which  falls  upon  the  products  of  our  own  indus- 
try, individuals  and  classes  will,  according  to  circum- 
stances,' be  benefited  or  injured  by  the  change;  but  as  a 
nation,  we  shall  neither  gain  nor  lose,  since  here  the  in- 
creased cheapness  of  gold  will  be  exactly  neutralized,  either 
by  a  corresponding  advance  in  price,  or  by  the  prevention  in 
the  same  degree  of  a  fall  which  would  otherwise  have  taken 
place.  It  is  in  this  way,  by  the  increased  command  which 
she  obtains  over  foreign  markets  by  her  cheap  gold,  —  and 
not,  as  is  commonly  supposed,  by  finding  an  outlet  for  her 
wares  in  California  and  Australia,  that  England  will  benefit 
by  the  gold  discoveries.  That  outlet  for  her  productions,  — 
were  the  movement  to  stop  here,  —  however  it  might  benefit 
individuals,  would  for  the  country  at  large  be  an  injury  and 
not  a  boon ;  it  would  deprive  her  of  that  which  might  con- 
duce to  her  comfort  and  happiness,  and  would  give  her  a 
"breed  of  barren  metal"  in  exchange.  But  the  movement 
does  not  stop  here.  The  money  which  she  obtains  from  the 
gold  countries,  instead  of  absorbing,  like  India  or  China,  she 
employs  in  purchasing  the  goods  of  other  nations.  It  is  in 
the  enlarged  command  which  she  acquires  over  such  goods 
that  hor  gain  consists,  and  it  is  thus  that  she  indemnifies 
herself,  though  at  the  expense  of  the  nations  who  ultimately 
retain  the  new  gold  for  the  loss,  the  indubitable  loss,  which 
she  is  called  on  in  the  first  instance  to  sustain. 


",  I 

I 


*  On  this  point  see  Cairnes,  p.  147,  et  aeq. 


7W 


284 


ECONOMIC  HISTORY. 


XI. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


From  Levassecr's  Histoibb  deb  Classes  Ouvrieres  en  France 
DEPuis  1789,  jcsqu'a  mob  jours.*     Vol.  ii.  pp.  307-321. 

T^EPUIS  quinze  ans,  trois  grand  faits  dconomiqucs  ont 
^-^  exercd  en  France  une  influence  considerable  sur  la 
production  manufacturidre ;  le  ddveloppement  du  credit,  la 
multiplication  des  chemins  de  fer  et  la  r^forme  douaiiiere. 

II  entrait  dans  Ics  vues  du  gouvernement  de  provoquer 
I'esprit  d'entreprise.  L'annde  1852  vit  se  former  deux  dtab- 
lissements  d'une  nature  trds-diverse,  mais  qui  tous  deux  de- 
vaient  coneourir  au  mSme  but,  celui  de  fournir  des  capltaux 
au  travail:  le  Credit  foncier,  et  le  Credit  mobilicr. 

Le  premier,  depuis  longtemps  r^clam^  par  M.  Wolowski, 
se  proposait  de  venir  en  aide  h  I'agriculture  en  avan^ant  sur 
premidre  liypotheque  k  la  propriety  fonci^re  des  sommes  rem- 
boursables  par  annuit^s;  en  rdalit^,  les  prSts  agricolcs,  qui 
augmentent  aujourd'hui,  ont  ^t^  les  plus  lents  h,  se  ddvelopper, 
et  la  nature  de  sa  clientele  I'a  fait  servir  plus  k  la  construc- 
tion des  maisons  et  aux  travaux  publics  dans  les  communes 
qu'k  la  culture  proprement  dite :  h,  ce  titre,  il  appartlent  ^ 
I'histoire  de  Tindustrie.  Le  second,  cr^d  et  dirig^  par  M.  E. 
P^reire,  est  une  puissante  banque  de  commandite  et  de  spec- 
ulation, non  sans  analogic  avec  celles  que  recommendait  le 
saint-simonisme.  II  ^tait  destind  par  ses  statuts  k  fonder  ou 
k  soutenir  de  grandes  entreprises,  et  il  a,  en  effet,  donn6  nais- 
sance  aux  chemins  de  fer  du  Midi,  k  la  compagnie  immobiliere 
de  Paris,  au  gaz  de  Marseille,  aux  paquebots  transatlantiques; 
il  devait  etre,  en  raison  mSme  de  son  caractdre,  tres-vivement 

*  Farii :  Libraire  de  L.  Hachette  et  Cie,  1807. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


285 


a£fectd  par  toutes  les  influences  de  hausse  et  de  baiase,  et  sa 
fortune  ddpendait  entidrement  de  Thabilet^  de  ses  directeurs. 

La  Banque  de  France,  dont  le  gouvcrnement  avait  le  droit 
de  suspendre  le  privilege  en  1855,  fut  affranchie  de  cette 
craintc  ct  autoris^e  h  faire  dcs  avances  sur  deput  d*actions  et 
dobiigations  de  chemin  de  fer : ^  la  spdculatiou  en  usa  large- 
mcnt.  Quclques  anndes  aprds,  la  Banque  obteuait  par  une 
loi  la  prorogation  de  son  privilege  jusqu'en  1897,  aux  prix  de 
100  millions  pret^s  k  I'^tat  et  fournis  par  une  dmission  de 
nouvdlcs  actions;  la  Banque  pouvait  Clever  le  taux  de  son 
escompte  au-dessus  de  6  pour  100,  et  le  gouvernement  pouvait 
exiger,  dix  ans  aprds  la  promulgation  de  la  loi,  qu'clle  eiit  au 
mollis  uno  succursale  par  ddpartement.* 

''Les  operations  de  la  Banque  se  sont  considdrablement 
am^iliordcs,"  disait  Ic  gouverneur,  en  parlant  dc  la  situation  en 
1852;  "le  commerce  et  I'iudustrie  ont  repris  leur  essor."  En 
cffet,  le  montant  dcs  operations  s'dtait  dlevd  d'un  milliard  et 
demi,  chiffre  de  1851,  ^  deux  milliards  et  demi.  Le  produit 
des  impots  indirccts  s'dtait  notablement  accru ;  la  rente  avait 
dt^passo  le  pair ;  toutes  les  valeurs  de  bourse  avaicnt  6i6  em- 
portdos  dans  le  mcme  mouvement,  et  les  marchandises,  sous 
la  triple  impulsion  de  I'abondance  de  I'or,  d'uno  consommation 
plus  active,  et  d'une  speculation  audacieuse,  enchdrissaient 
chaque  jour. 

Ce  fut  I'age  d'or  de  la  Bourse.  Londres,  qui  avait  4t4 
dcpuis  le  commencement  du  sidcle  le  principal  marchd  des 
capitaux  ct  des  grandes  entreprises  en  Europe,  cdda  le  pas  h 
Paris.  L'elan  dtait  tel  qu'il  permit  au  commerce  de  franchir 
le  clioldra,  la  disette,  la  guerre  d'Orient,  et  h  I'Etat  d'emprun- 
ter  un  milliard  ct  demi  sans  briser  le  ressort  du  crddit.  Les 
capitaux,  i  peine  formds,  dtaient  absorbds ;  les  travaux  pub- 
lics, les  emprunts,  la  disette  elle-mSme,  tout  y  contribuait ; 
oil  spdculait  h  la  hausse,  et  les  cours  s'dlevaient. 

Cep^ndant  les  affaires  dtaient  devenuea  plus  diflliciles  en 
1856 :  le  gouvcrnement  crut  utile  d'enrayer  lui-m6me  la  spd- 
culation^  et  de  faire  une  loi  restrictive  sur  les  socidtds  en  com- 


»  Wcret  du  28  mars,  1852. 

•  Voir  au  Mon.,  la  note  du  9  mars,  1856. 


Loi  du  9  Jain.  1867. 


ll  ■  ■  ■ 

'    '            '              ■■4 

1':!    : 

286 


ECONOMIC  HISTORY. 


mandite  par  actions.*  La  langueur  continua  ccpendant  en 
1857,  et  Tabondance  de  la  r^colte  rendait  inevitable  la  baissc 
des  denrdcs,  lorsque,  vera  le  mois  d'aoClt,  la  crise  ^clata  arec 
violence  aux  Etats-Unis.  Elle  se  communiqua  rapidement  I 
Londres,  h,  Hambourg,  2i  Paris.  Quoique  moins  rudcmcnt 
dprouv^e  que  scs  voisines,  la  France  vit,  comme  ellcs,  les 
sources  du  credit  tarir ;  la  speculation  dut  liquider,  et  Tannine 
1858  fut  marquee  par  une  baisse  g^n^rale  des  marchandises' 
et  par  uu  ralentissement  des  transactions. 

La  guerre  d'ltalie  qui  survint  Tann^e  suivante,  et  ses  con- 
sequences qui  se  firent  sentir  jusqu'en  1862,  empecherent  Ics 
affaires  de  repreudre  leur  essor  jusqu'au  jour  oii  Ic  combat 
d'Aspromonte  At  croire  &  la  consolidation  du  tr6ne  dc  Victor- 
Emmanuel.  Les  cours  se  relevdrent  alors,  et  Tesprit  d'entre- 
prisc  se  ranima.  Mais  une  autre  cause  de  malaise  pesait 
dejS.  sur  le  marche:  la  guerre  d'Amerique  privait  I'Europe 
de  coton  et  rdduisait  k  la  misSre  les  districts  manufacturiers 
de  I'Angleterre  et  de  la  France.  Une  crise  mondtaire  s'en- 
suivit;  en  1864,  Tescompte  de  la  Banque  de  France  rnouta 
k  8  pour  100,8  et  le  gouvernement,  soUicite  par  une  petition 
de  trois  cents  n^gociants  et  par  une  contrepetition  de  la 
Banque,  ordonna  une  enqu6te  sur  le  regime  du  credit.  Cette 
crise  s'apaisait  &  son  tour,  lorsque  edata  la  guerre  du  Pane- 
mark,  puis  la  guerre  d'AUcmague.  Les  agitations  de  la  po- 
litique, dans  le  vieux  et  dans  le  nouveau  monde,  contrarient 
frequemment,  depuis  dix  ans,  le  deploiement  pacifique  des 
forces  du  travail  marchant  ^  la  conquSte  de  la  matidre. 

Une  ville  a  particulidrement  souflfert,  et  souffre  aujourd'hui 
plus  que  les  autres,  de  la  langueur  des  affaires  dont  se  plaint 
le  commerce.  C'est  Lyon,  dont  la  nombreusc  population 
ouvri^re,  dependant  presque  tout  entifire,  pour  sa  subsistance, 
d'une  seule  industrie  de  luxe,  est  toujours  la  premiere  i 
s'affaisser  sous  le  coup  des  crises  et  la  dernidre  h  se  relever. 

1  Loi  du  17  Juillet,  1866.  II  s'^tait  form^,  en  1862,  21  socUt^s  de  ce  genre; 
en  1863,  26 ;  en  1864,  36 ;  en  1866,  18  i  en  1866, 17.  II  s'en  forma,  en  185:,  6; 
13  en  1858,  et  12  en  1869. 

'  Voir,  sur  cette  crise,  la  Qiuition  dt  I'm,  par  E.  Levasseur. 

*  Au  mois  de  mai. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


287 


Elle  avait  d^vcloppd  sea  relations  cxt^ricures;  la  guerre 
d'Am^rique  lui  a  ^t^  funeste;  de  84  millions  en  1858,  l  ex- 
portation do  la  soierie  est  tomb^e  h,  11  millions  en  1865.^  Le 
meillcur  remOde  pour  elle  serait,  &  cdt^  de  son  industrie  do 
luxe,  soutuise  aux  caprices  dc  la  mode  et  aux  variations  de 
la  fortune,  la  creation  d'une  Industrie  commune  ayaut  un 
large  ddbouch^. 

N^anmoins,  malgrd  les  obstacles,  le  travail  a  brillamment 
d^ploy^  SOS  forces.^  La  Banque  de  France,  dont  les  escomptes, 
^  Paris,  avaient  une  seule  fois  atteint  1,829  millions,  sous  le 
regne  de  Louis-Philippe,  atteignit  de  nouveau  et  d^passa  ce 
chiffre  en  1856;  en  1865,  elle  faisait  2,458  millions.  Elle 
^tait  alors  devenue  la  seule  banque  d^^mission  et  la  r^gula- 
trice  soiiveraine  du  credit  en  France ;  les  operations  de  ses 
succursalcs,  jointes  au  chififre  des  affaires  de  Paris,  formaient, 
^  la  mcme  ^poque,  un  total  de  7,422  millions,  tandis  qu'en 
1847  les  banques  ddpartementales  et  la  fianque  de  France 
n'attcignaicnt  que  2,075  millions.  Dans  le  m@me  temps,  sans 
que  le  commerce  des  banques  privies  parut  diminuer,^  se  fon- 
daicut  d'autres  grands  ^tablissements,  comme  la  Socidtd  g^nd- 
rale  de  crddit  industriel  et  commercial,*  la  Socidtd  de  ddp6ts 
et  de  coraptes  courants,*  la  Socidt^  gdndrale  pour  favoriser 
le  commerce  et  I'industrie  en  France.*  L'usage  des  cheques, 
autrement  dit  Thabitude  de  ddposer  en  banque  ses  fonds  de 
caisse  et  dc  faire  ses  paiements  en  mandats,  commence,  quoique 
trop  lentemcnt,  ^  se  naturaliser  en  France  et  h,  mettre  une  plus 
graude  masse  de  capitaux  &  la  disposition  du  crddit. 

Parmi  les  entreprises  qui  devaient  obtenir  la  faveur,  les 
chemins  de  fer  dtaient  au  premier  rang.  On  avait  souvent 
reprochd  h,  la  France  de  s'Stre  laissd  devancer  par  ses  voisins, 
et  I'actlvitd  imprimde  aux  constructions  durant  la  seconde 
moitid  du  r^gne  de  Louis  Philippe  par  la  loide  1842,  s'dtait 

'  Lettre  de  M.  Arlfes  Dufonr  it  YOpinim  nntlonale  du  18  octobre,  1866. 

'  Le  progr^s  des  imp6ts  indirects,  qui  a  continue  en  1866,  est,  avec  le  progrbs 
du  commerce  cxtdrieur,  une  preuve  que  la  aituation,  cnnside'r^e  dans  son  ensem- 
lilc,  n'a  pas  empire  depuis  un  an,  malgr^  la  langueur  des  affaires  dans  diverse* 
induitrles. 

*  On  pri^tend  toutefnts  qu'il  n'augmente  pai.  *  7  mai,  1859. 

'6juillet,  1863.  •  4  mai,  1864. 


288 


ECONOMIC  HISTORY. 


m 


amortie  sous  la  Rdpublique.  Le  nouveau  gouverncmcnt  la 
ranima.^  Lcs  capitaux  dtaient  confiants.  On  en  profita  pour 
inaugurer  un  autre  mude  do  concession.  A  la  construction 
do  la  voie  par  T^tat,  on  substitua  la  construction  par  lc9 
compagnics  quo  Ton  cncouragea  par  uuo  longue  jouissance; 
les  baux,  avec  lcs  nouvellcs  compagnics  et  meme  avec  les 
ancicnucs,  furcnt  la  plupart  passds  ou  revises  pour  quatrc- 
vingt-dix-ncuf  ans.^  On  engageait  sans  doute  un  plus  loin- 
tain  avcnir ;  inais  on  faisait  imm^diatement  peser  toute  la 
charge  sur  les  capitaux  appel^s  k  recueillir  lcs  bdn^>(ices  les 
plus  directs  de  Tentreprise ;  la  conibinaison  ^tait  dvidemment 
pr^fdrable.     Ellc  n'eut  pas  dt^  possible  dix  ans  plus  tdt. 

Les  concessions  multiples,  errant  dcs  intdruts  divers  et 
parfois  hostiles  sur  un  mSme  parcours,  dtaient  un  obstacle  a 
la  circulation.  On  les  rdunit,  le  mani^re  k  former  de  vastes 
compagnies  qui  se  partagdrent  le  domaine  du  rdscau  f ran^ais : 
ce  ne  fut  pas  sans  quelques  tfttonnements  qui  fournirent  des 
armes  k  la  speculation.^  Mais  dans  Tespace  do  la  premiere 
annde,  3,000  kilometres  trouvaient  des  concesslonnaires ;  et, 
k  la  fin  de  la  quatridme  annde,  sur  une  longueur  d'cnviron 
6,000  kilomdtres,  les  trains  circulaient. 

Les  grandes  art^res  dtaient  dessindcs  et  allaient  se  terminer 
en  pen  d'anndes.  Le  gouvernement  rdsolut  hardiment  d'abor- 
der  la  construction  des  ligncs  secondaires  et  de  faire  pdiidtrer 
la  vie  commerciale  dans  tout  le  corps  de  la  nation,  comrae  les 
petits  vaisseaux  font  pdndtrer  le  sang  jusque  dans  les  chairs 
de  I'homme.  Cette  fois,  le  profit  ne  semblait  pas  pouvoir  de 
longtemps  rdmundrer  la  ddpense  et  d'aillcurs  la  crise  de  1857 
avait  rendu  plus  timides  les  entreprises.  Le  gouvernement 
intervint,  et,  par  deux  lois  successives,*  donna  des  subventions 

»  Le  cliemin  de  ceintiire  avail  (t4  icr4t4  dha  le  11  d^cembre  1851.  Dans  U 
■eule  annde  1852,  46  de'crete  furent  rendus  relativement  aux  chemins  de  fer,  et 
2G7  kilom.  furent  livres  ii  la  circulation. 

'  Les  concessiona  dtaient  faites  pour  99  ans,  avec  garantie,  pour  le  capit«l 
engagd  par  les  Compagnies,  d'un  minimum  d'int^rfit  de  4%  pendant  la  moitiNe 
ce  temps.  Quelques  concessions  furent  mime  faites  sans  garantie.  Cette  gi- 
rantie  fut  d'ailleurs  supprim^  pour  le  premier  rdseau,  lorsque  la  loi  du  U  yw, 
1869,  accorda  une  garantie  partlculiire  au  second  rdseau. 

*  D^crets  du  17  Janvier,  10  f^vrier,  20,  27  mars,  1862. 

«  Lois  du  11  Juin,  1850,  et  du  11  juiu,  1863. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


289 


ou  garantit  aux  capitaux  du  second  rdscau,  Icsqucis  devaient 
etrc  fournh  par  dcs  obligations,  un  intdrSt  de  4  pour  100  et  Ta- 
mortisacmont  en  cinquante  ans. 

Cost  aiiisl  qu'^  la  fin  de  I'annde  1866,  la  longueur  totale 
des  concessiuns  ddfiuitives  atteignait  21,050  kilom.,  et  cclle 
(les  ligncs  cxploitdcs,  14,506 ;  la  ddpense  faite  s'dievait  &  pr^s 
de  7  milliards.' 

Les  canaux,  quoique  reldguds  au  second  plan,  ont  6t6  ter- 
minC'S  snr  plusicurs  points,  entrepris  sur  quelques  autrcs,'  et 
8ont  rentros,  pour  la  plupart,  dans  le  domaine  do  rEtat,^  qui 
s'est  einprcsad  d'abaisser  presque  parte  at  les  droits  au  niveau 
dcs  frais  d'cntretien.  La  navigation  des  rivieres  a  6t6  amd- 
lior<;e.*  Les  grandes  routes,  parallSlcs  aux  voics  de  fer,  se 
tiouvaient  d<jlais8<5c8 ;  mais  les  routes  transversalcs,  emportant 
ou  a{iportant  voyageurs  et  marcliandiscs,  que  les  trains  re- 
cueillcnt  ou  soment  sur  leur  route,  s'animaient.^  On  a  en 
consequence  redouble  de  zele  dans  I'application  de  la  loi  de 
1836  sur  les  chemins  vicinaux,^  et  une  loi  nouvelle  a  encou- 
rage les  conseils  gdndraux  k  construire,  aux  memes  conditions, 
des  chemins  de  fer,  qui,  ^  I'exemple  de  ceux  de  I'Alsace,  for- 
raeront  un  troisieme  rdseauJ 

La  tdldgraphie  dlectrique,  qui  dtait  ^  ses  ddbuts  en  1851, 
a  commencd  h  envelopper  de  son  rdseau  la  France,  h  la  suite  du 

'  On  se  rappelle  qu'k  la  fin  du  rfegne  de  Louis-Philippe,  In  de'pense  cffectu^e 
etait  d'environ  1  milliard  \,  et  le  nombre  de  kilometres  exploitos  de  1830. 

*  La  France  posscdait  4,200  kilom.  de  canaux  en  1848,  et,  en  1866,  4.500; 
de  plus,  0,'JOO  kil.  de  rivieres  navigablcs.  De  grands  travaux  ont  c't^  poursuivis. 
Voir  Exp.  de  la  sit.  de  t'Emp.,  1867,  Man.,  p.  450  et  4-51. 

'  Decret  du  j.invicr,  1852,  et  loi  du  28  juillet,  1800. 

•  Voir,  entre  autres,  la  loi  du  14  juillet,  1861. 

'  De  1848  a  1866  exclusivement,  I'fitat  a  de'penstf  pour  routes,  canaux. 
ponts,  pharos,  etc.,  627  millions. 

'  Relativenient  aux  chemins  de  fer,  routes,  canaux.  etc.  M.  P.  Boiteau. 
VoiT  Foiliine  puhlique  et  finances  de  la  France,  1. 1.  Le  chemins  vicinaux  ont 
coite  en  1866, 120  millions,  dont  un  tiers  en  prestations,  en  nature. 

'  C'cst  en  1859  et  1860  que  le  conseil  ge'ndral  du  Bas-Rhin,  M.  Mlgneret 
e'tant  prdfet,  classa  les  premiers  chemins  de  ce  genre.  — La  loi  rendue  sur  la 
mati^re  est  du  12  juillet,  1865.  Deux  d^partements  (Eure,  Saone  et  Loire),  inde- 
pendamment  du  Haut  et  du  Bas-Rhin  ont  d^jk  entrepris  des  chemins  de  ce 
genre.  29  autres  dcpartements  ont  d<?cid(J  en  principe  des  creations  du  mSme 
genre. 

19 


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1 

290 


ECONOMIC  HISTORY. 


d^cret  du  6  Janvier,  1852;  elle  couvre  aujourd'hui  rEurope;' 
elle  fait  communiquer  leg  deux  mondes  et  transinet,  en  France 
seulcment,  prds  de  trois  millions  de  ddp^ches  pour  le  compte 
dea  particuliers.'  La  poste,  dont  le  service  a  re^u  k  diverses 
reprises  de  notables  ameliorations,  transportait  trois  fois  plug 
de  lettres  on  d'imprim^s,  en  1865  qu'en  1847 ;'  de  nombreuses 
conventions  postalcs  et  des  conventions  mondtaires  out  ^t^ 
signdes  avec  les  pays  voisins.*  Les  regions  lointaines  de  I'Asie 
et  de  TAmdrique  ont  ^t^  mises  en  relations  r^gulidres  avec 
nos  ports  par  la  Compagnie  des  messageries  impi^riales,  qui 
s'est  habiletnent  transform^e  devant  la  concurrence  des  che- 
mins  de  fer,  et  par  la  Compagnie  des  paquebots  transatlan- 
tiques  dont,  vingt  ans  auparavant,  un  ministre  aurait  d^jlk 
voulu  doter  la  France." 

Les  hommes,  leurs  pens^es  et  leurs  produits  circulent  au- 
jourd'hui en  beaucoup  plus  grande  nombre,'  avec  plus  de 
rapidity  et  k  moins  de  f rais :  cette  mobility  qui  a  scnsiblement 
modifie  r^conomie  de  la  vie  priv^e,  et  qui  modi  Be  les  rapports 
des  nations,  restera  un  des  caractdres  distinctifs  de  la  scconde 
moiti^  du  dix-neuvidme  sidcle. 

Avec  de  pareilles  conditions,  le  commerce  ext^rieur  ne 
pouvait  manquer  de  s'accrottro.    En  1850,  ^poque  ^  laquelle 

1  Orftce  k  la  convention  t^^graphiqne  du  17  mat,  1866,  "  le  r^seau  t(\4gn- 
phique  du  continent  europ^en  est  adjourd'iiui,  dans  toutes  ses  parties  sans  excep- 
tion, soumis  k  des  principes  et  k  des  regies  uniformcs."  Exp.  de  la  sit.  de  PEmp., 
1867. 

3  2,367,991  d^pSclies  dans  les  10  premiers  mois  de  1866,  ce  qui  suppose  envi- 
ron 2,480,000  pour  I'anntfe.  Au  1«'  d^c,  1866,  il  y  avait  2,091  bureaux  te'le'gra- 
pliiques.  Des  lignes  souterraines  ont  4ti  Stabiles  dans  quelques  grandes  viiles 
et  des  flis  d'un  diam^tre  8up<$rieur  sur  les  principales  lignes  pour  prcrenir  les 
interruptions  de  service. 

>  En  1847,  216  millions ;  en  1865,  690  millions. 

*  La  convention  mon^taire  du  23  d^c,  18C5,  a  ^tabli  une  monnaie  uiiiforme 
(mats  critiquable  k  rertain  ^gard)  entre  la  France,  la  Belgique,  la  Suisse,  I'ltalie, 
et  commence  k  const! tuer  ce  que  M.  de  Parieu  nomme  le  MUmverein  latin. 

*  Plusieurs  autres  services  ont  M  ^tablis,  Exp.  de  la  lit.  de  I'Emp.,  1867. 

'  Le  nombre  des  voyageurs  des  chcmins  de  fer  ^tait  de  37  millions  en  1867, 
de  84  millions  en  1806.  Dans  cette  demi^re  ann^e,  les  84  millions  de  voysgeun 
ont  fait  3,861  millions  de  kilombtres,  et  34  millions  de  tonnes  ont  fait  6,171  mil- 
lions de  kil.  Le  produit  brut  a  M  de  184  millions  de  francs  pour  les  voyageun 
et  de  314  millions  pour  les  marcliandises.  Depuis  1865,  le  prix  moyen  Idlom^- 
trique  du  transport  de  la  tonne  a  baisstf  de  0  fr.  k  1,117. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


291 


il  avait  &  peu  prds  retrouv^  le  niveau  de  Pann^e  la  plus  pros- 
pOre  du  rt^giie  de  Louis-Philippe,  il  ^tait  de  2,555  millions. 
En  1864,  il  s'^levait  &  7,829  millions,  c*est-^ire  qu'il  a  pres- 
que  triple  dans  Tespacc  de  quinze  ans. 

Si  Ton  prend  la  moyenne  de  chacun  des  trois  lustres  qui 
composent  cette  pdriode,  on  constate,  non-seulement  uu  pro- 
gris,  mais  unc  progression  constante,  &  n'envisager  que  los 
marchandises  import^es  ou  exportdes  au  commerce  special. 
La  raoyenne  de  1850-1854  est  de  2,294  millions;  celle  de 
1855-1859,  de  3,626  millions,  et  celle  de  1860-1864,  pdriode 
pendant  laqucllc  I'abaissement  des  tarifs  fran9ais  a  provoqu^ 
la  concurrence  ^trangdre,  de  4,701  millions  et  le  progr^s 
continu^.^ 

II  a  dt^  plus  rapide  qu'aux  deux  ^poques  pr^c^dentes  de 
notre  histoire  contemporaine.  Durant  les  quinze  ann^es  de 
la  Restauration,  notre  commerce  ext^rieur  avait  &  peu  prds 
double ;  durant  les  dix-sept  aun^es  du  r^gne  de  Louis-Phi- 
lippe, il  avait  fait  un  peu  plus  que  doubler.' 

Cc  progrds  tient  h,  des  causes  g^n^rales  et  n'est  pas  un 
privilege  particulicr  h,  la  France.  Dans  les  ^tablissements 
de  credit  c'est  elle  qui  a  donn^  des  exemples  a  une  partie  de 
rEurope,  mais  elle  n'a  fait  que  suivre  &  distance  I'Angleterre ; 
dans  la  construction  des  chemins  de  fer,  elle  avait  €t^  devan- 
c^e  par  plusieurs  Etats.  Cependant  aucune  nation,  la  Bel- 
gique  exceptde,^  n'a,  depuis  quinze  ans,  plus  largement  que 
la  France,  dtendu  ses  relations  ext^rieures.     Pendant  qu'elle 

'  Ces  chiffres,  il  est  vrai,  sont  ceux  des  valeurs  actuelles,  c'est-k-dire  des  prix 
du  marche,  et,  conime  la  valeur  de  I'argent  a  diminu^,  ils  ne  reprdscntent  pas 
une  qiinntite'  triple  de  mardiandises.  L'ann^e  1866,  dont  on  ne  connait  encore 
que  le  co..imerce  special,  a  produit  &,08l  millions,  I'anncfe  1866  produira  environ 
6,360  millions  (a  produit  6,^108  millions  pour  les  10  premiers  mois) ;  le  com- 
i.i°rce  sp^uial  de  18U4  dtait  de  6,452  millions.  La  navigation  s'est  accrue 
cnmnie  le  reste;  12,631,504  tonnes  en  1864;  17,638,900  tonnes  en  1866.  La 
rrincipale  augmentation  a  4t6  pour  les  ports  de  Marseille,  du  Havre,  et  de 
Bordeaux. 

^  En  1815  (tr^s-mauvaise  ann(fe  d'ailleurs),  621  millions;  en  1830, 1,211  mil- 
lions; en  1847,  2,437  millions. 

^  Beigique,  en  1886,  868  millions  de  francs,  et,  en  1847,  684 ;  en  1860,  618 
millions,  et,  en  1864,  2,432  millions ;  ce  qui  fait  environ  600  fr  par  habitant 
En  France,  la  proportion  n'est  pas  tout  k  fait  de  200  fr.  par  habitant.  Elle  est 
en  Angleterre  de  366  fr. 


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292 


ECONOMIC  HISTORY. 


en  triplait  lo  chiffrc,  la  plupart  des  pays  coraincr9ant8,  ct 
TAnglcterro  en  particulier,  doublaient  seulement  Ic  Icur;  il 
est  juHto  de  notcr  tuutcfois  que  ce  doublement,  en  Angletcrre, 
portait  son  chiifro  &  11  milliards.* 

II  rcstc  ^  dire  qucUcs  lois  ont  favoris^  cette  extension  du 
commerce  et  rdgissent  aujourd*hui  lu  travail. 

LES  TRAITfiS  DE  COMMERCE. 

Quelqucs  jours  aprds  la  proclamation  de  TEmpire,  le  8<!na> 
tus-cunsulto  du  25  ddcembre  1852  interpr^'tait  et  ^tendait  Ics 
prerogatives  du  souvcrain  en  matiere  de  trait^s  de  commorce, 
en  declarant  qu'ils  auraient  "  force  de  loi  pour  Ics  modifica- 
tions de  tarif  qui  y  sont  stipuldes,"  c'e8t-&,-dirc  que  le  Corps 
Idgislatif  n'aurait  plus  le  droit  de  lee  ratificr  ou  de  Ics  annulcr 
par  son  vote.  Ce  pouvoir,  rerais  au  chef  de  I'Etat,  pouvait, 
en  dehors  des  consid^irations  politiques,  inquidter  certains 
intdrcts ;  le  president  du  Sdnat,  dans  son  rapport,  s'appliijua 
ii  les  rnssurcr  en  se  pronon^ant  contre  Ics  theories  du  la  libcrtd 
commercialc. 

Cependant  la  rdcolte  de  1853  fut  mauvaise.  L'importation 
seule  pouvait  combler  le  deficit.  Le  gouvernement,  pour  ren- 
courager,  n'h<^sita  pas  &  abaisser  toutes  les  barriercs  de  la 
douanc ;  il  ddcrdta  la  suspension  de  I'dchelle  mobile,^  rcxcmp- 
tion  du  droit  de  tonnage  et  de  la  surtaxe  de  pavilion  pour  Ics 
navires  charg<58  de  substances  alimentaires,^  rabaissemeut  du 
droit  sur  les  bestiaux.*  Ce  n'dtaient  que  des  mcsures  tonipo- 
raires ;  mais  elles  scmblaient  indiquer  un  esprit  iiouvcnu. 

1  En  1864  (premiiire  ann^e  oil  la  statistique  ait  donn<5  les  valeurs),  268  millions 
de  livres  sterling;,  et,  en  1864,  435  millions  (soit  environ  10  niillinnis,  liOO  mil- 
lions). En  1830,  une  statistique  anglaise  (voir  les  Annates  du  commerce  ert&ieur) 
donnait  120  millions :  il  y  anrait  done  eu  k  pen  prfes  doublement  de  1880  ii  l^^M). 
Pays-Bas,  en  18.S-2,  471  millions  de  francs ;  en  1850,  1,079 ;  en  lH<i4,  1,!I04. 
Russie,  en  1850,  102  millions  de  roubles;  en  1863,  306  millions.  Etiits-Uiiis,  on 
1831,  environ  184  millions  de  dollars ;  en  1851,  412  millions  en  1860,  762 
millions. 

2  De'cret  du  18  aoflt,  185.3.  Cette  rdforme  ^tait  alors  demandce  par  le  conseil 
municipal  de  Marseille  et  par  le  conseil  ge'ne'ral  de  I'Herault  que  prc'sidait  M. 
Michel  Chevalier 

»  Dec.  du  8  aoat,  1853. 

*  D^c.  du  14  septembre,  1853.  —  Les  droits  sur  boeufs  et  taureaux  ^taient 
r^duits  de  50  f r.  k  3  fr. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


293 


Dans  Ics  doux  camps  opposds  on  s'^mut  M.  Jean  Dullfus 
entreprit  uno  caiupagne  contre  la  prohibition  des  iils  do  coton. 
Lc  ddbat  fut  port^  succcssivcment  devant  la  Socidt^  indua* 
triclle  de  Mulhousc,  devant  le  Conseii  sup^rieur  du  commorcc, 
et  dans  le  cabinet  de  rEmperour :  M.  DoUfus  attaqua,  M.M. 
Fcray  d'Gssonne  et  Seillidrc  ddfendirent  le  systSme  protccteur. 
Lc  tarif  dos  colons  ue  subit  qu'une  modification  Idgdro ;  ^  mais 
(Idj^  uu  d(;cret,  plus  siguificatif,  changeait  les  zones  d*entrdo 
pour  la  huuillc  et  diminuait,  de  moitid  environ,  le  droit  sur 
los  fcrs.^  Deux  ans  apri^s,  nouvelle  rdduction,  et,  comme  con- 
sequence, abaissement  du  droit  sur  le  fcr-blauc,  le  fil  de  fer,  la 
vicille  fcrraillc,  et  les  machines.^  L'annde  1855  dtait  marquee, 
ea  untie,  par  le  retranchcment  de  prds  de  200  articles  sans 
importance,  tcls  que  les  yeux  d'dcrevisse  ou  le  gui  de  chene, 
qui  allongeaicnt  le  tarif  sans  profit  pour  le  Trdsor,*  et  par 
une  diminution  importante  du  droit  sur  les  laincs  et  les  peaux 
brutes.^  La  tendance  du  gouvernement  s'accusait  avec  plus 
de  nettetd. 

L'Exposition  universelle  de  Paris  venait  d'avoir  lieu  et  I'in- 
dustrie  fran9ai8e  y  avait  brills  au  premier  rang  parmi  les 
nations.  Dans  le  but  d'dpargner  aux  exposants  strangers  1^ 
la  coutense  ndcessitd  de  remporter  lours  produits,  et  peut-etre 
au8si  de  tenter  une  experience,  le  prince  Napoldon,  president 
de  la  Commission,  avait  fait  decider  que  tons  les  objets  ex- 
))os<>s,  qu'ils  fussent  prohibds  ou  non,  pourraient  dtre  vendus 
et  admis  cxceptionnellement  en  France  en  payant  un  droit  de 
22  p.  100.^  Or,  sur  un  total  d'environ  22  millions  de  richesses 
^trangorcs,  qui  avaient  6t6,  pendant  plusieurs  mois,  dtaldes 
sous  les  yeux  d'un  public  si  nombreux,  2  millions  J  seulement 
avaient  trouvd  des  acheteurs  fran9ai8 J  L'industrio  fran^aise 
n'^tait  done  pas  aussi  incapable  de  lutter  contre  la  concur- 
rence du  dehors  que  le  proclamaient  les  partes  intdressdes. 

»  Voir  le  de'cret  du  28  d^cembre,  1863. 

'  Dec.  du  22  novembre,  1863.  — La  diminution  sar  I'acier  fonda  ^ait  mfime 
beaucoup  plus  forte    de  132  fr.  k  8  fr. 

•  Doc.  du  septembre,  1856.  «  D««c.  du  16  juillet,  1856. 
^  Dec.  du  17  Janvier  et  du  10  d^cembre,  1866. 

*  We.  du  6  avril,  1854. 

'  Voir  Journ.  des  Econ.,  2*  B^rie,  t.  xi.  p.  471. 


294 


ECONOMIC  HISTORY. 


"  L'observation  qui  m*a  frapp^  tout  d'abord,"  disait  Ic  prince 
Napoleon  dans  son  rapport,  "c'ost  que  de  ces  grands  concouiB 
jaillit  uue  fois  do  plus  la  preuve  que  leg  soci^t^s  niodcriios 
marchent  vers  la  liberty."  D^j&  ie  gourernemcnt,  d^sircux  dc 
d^velopper  "  lea  relations  internationalcs  qui  pr^parciit  le 
progrds  de  la  civilisation,"  avait  prdsent^  au  Corps  l^igislatif 
"  un  projet  levant  toutcs  les  prohibitions."  Pour  la  premiere 
fois  peut-Stre,  il  avait  rencontrd  uno  resistance  qui  I'avait 
d'autant  plus  ^tonn^  qu'ello  ^tait  plus  rare  et  qu'elle  chcrchait 
&  prendre  son  point  d'appui,  hors  de  TasBcmbMe,  dans  I'agita- 
tion  des  villes  mauufacturidres.  II  retira  le  projet,  en  annon- 
f ant  qu'une  nouvcUe  loi  dtait  miso  k  I'dtudc,  et  que  la  Icvt-c 
des  prohibitions  n'aurait  lieu  qu'&  partir  du  1*'  juillct,  1861. 
"  LMndustrio  fran^aise,  prdvenue  des  intentions  bicn  arretdcs 
du  gouverncment,  ajoutait  le  Moniteur,  aura  tout  le  temps 
n^cessaire  pour  se  pr()parer  h  un  nouveau  rdgimc  commercial.' 

Durant  trois  ans,  le  silence  se  fit  sur  cette  grave  question.^ 
D'ailleurs  vers  la  fin  de  1857,  une  crise  terrible  avait  (l<;sar- 
^onnd  la  speculation  et  fait  momentandmcnt  reflucr  en  baisse  le 
prix,  sans  cesse  montant  depuis  1852,  des  denr^es,  des  nmtieres 
premieres,  et,  par  suite,  des  objets  manufactures ;  la  rcprLse  des 
travaux  avait  6t6  suspendue  en  1859  par  la  guerre  d'ltalic. 

Le  commerce  commen^ait  h  peine  k  retrouver  son  dquilibre, 
lorsque,  le  15  Janvier  1860,  le  Moniteur  publia  la  lettre  que 
I'Empereur  avait,  quelques  jours  auparavant,  ecritc  k  sou 
ministre  des  finances.^  Cetait  un  vaste  programme  ecoiio- 
•mique  dont  le  but  etait  "  d'imprlmer  un  grand  cssor  aux  di- 
verses  branches  de  la  richesse  nationale,"  et  que  son  auteur 
rdsumait  en  ces  termes  :  — 

''  Suppression  des  droits  sur  la  laine  et  les  cotons  ; 

"  Reduction  successive  sur  les  sucres  et  les  cafes ; 

"  Amelioration  energiquement  poursuivie  des  voics  dc  com- 
munication. 

"  Reduction  des  droits  sur  les  canaux,  et,  par  suite,  abaisse- 
ment  general  des  frais  de  transport ; 

*  Moniteur  du  17  octobre,  1856. 

'  Cependant  plusieura  dc^crets  importants  furent  rendus. 

•  Lettre  du  6  Janvier,  1860. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


296 


<>  Frets  ^  Tagriculture  et  &  TinduBtrie ; 

<'  Suppression  des  prohibitions ; 

<•  Traitd  do  commerce  avoc  les  puissances  ^trangdres." 

<<  Par  CCS  mcsurcs,"  ajoutait  TEmporeur,  "  Tagriculture 
frouvcra  I'^coulcmont  dc  ses  produits ;  Tindustrie,  affranchio 
d'entravcs  oxtdricurcs,  aid^o  par  le  gouvernement,  stimul^e 
par  la  concurrence,  luttera  avantageusoment  avec  les  produits 
dtran^'crs,  et  notro  commerce,  au  lieu  de  languir,  preudra  un 
nouvel  cssor." 

La  pcnsde  du  gouvernement,  sur  ce  point,  se  relevait  tout 
cnti(ire.  II  <^tait  impossible  qu'issu  du  suffrage  universci  et 
(Idgagt^  dcs  liens  qui  avaient  arrets  ses  pr^ddcesseurs,  il  con* 
scntit  d  mointenir  dans  son  int^grit^  le  systdme  prohibitif  que 
les  gouvcrncments  pr^c^dents  eux-m6mcs  u'avaicnt  cr<jd  ou  con- 
aerv<>  aussi  rigoureux  quo  par  la  n^cessitd  de  compter  avec  de 
puissantcs  influences ;  mais  il  edt  pu  so  faire  qu'un  autre  sou* 
veraiii  cmbrassut  moins  rdsolilment  un  moins  vaste  ensemble. 
Quoi  qu'il  en  soit,  dcpuis  Ij  d^cret  de  Berlin,  aucun  fait 
aussi  considerable  ne  s'^tait  produit  dans  rkistoiro  dc  notre 
i<!gislation  douanidre. 

D(;ja  dtainnt  arretds  les  articles  du  plus  important  traits  de 
commerce  tjue  put  signer  la  France,  do  celui  qui  devait  la  lier 
^  sa  rivalc  la  plus  rcdout^o.  Le  h^ros  de  la  liguc  anglaise, 
Richard  Cobden,  et  M.  Michel  Chevalier,  qui,  dcpuis  1852, 
faisait  i\  chaque  session  du  Conseil  g^ndral  de  I'H^rault,  voter 
un  manifeste  en  favour  de  la  libertd  commerciale,  en  avaient 
eu  les  premiers  la  ponsde,  et  avaient  trouvd  des  disposi- 
tions favorablos  dans  le  ministdre  anglais  et  ^  la  cour 
dcs  Tuilcries.  Au  Icndemain  de  la  paix  do  Villafranca  et  h, 
la  vcillc  du  trait<?  de  Turin,  TEmpercur,  d(;sircux  de  sorrcr 
les  nauds  pacifi(jiie8  de  la  France  et  de  rAngleterre,  approuva 
un  projct  qui  rdpondait  aux  besoins  de  sa  politique  ext<jrieure 
comme  h,  ses  vues  de  rdformes  dconomiques,  et  dds  la  fin  do 
uovembre,  1859,  les  n<^gociations  prdlirainairos,  conduites  avoc 
le  plus  grand  secret  par  M.  Rouhor,  ministro  du  commerce,  et 
par  les  deux  dconomistes,  dtaient  termindes.  Ce  fut  par  la 
lettrc  du  5  Janvier  que  la  France  apprit  qu'elle  entrait  dans 
line  nouvelle  dre  industrielle.  Le  23  du  meme  mois,  le  traits 
^tait  sigiK;. 


296 


ECONOMIC  HISTORY. 


Les  prohibitions  ^taient  supprim^es.  Lcs  marchandises 
anglaises  entreraient  en  Franco  en  payant  un  droit  ad  valorem 
qui  serait  bicntSt  convert!  en  droit  sp^cifiquo,  et  qui  n'excdde- 
rait  pas  30  pour  100  au  ddbut,  25  pour  100  ^  partir  de  raimde 
1864.  La  Grande-Bretagne,  de  son  c6td,  admettait  en  pleine 
franchise  nos  produits,  qui  payaient  encore  pour  la  plupart  uu 
droit  de  10  pour  100,  et  ne  pr^levait  plus  qu'une  taxe  variable 
de  1  ^  2  schcllings  sur  nos  vins,  et  de  8  schellings  5  pence  sur 
nos  eaux-de-vie.^ 

Le  traits  du  23  Janvier  ^tait  un  type  sur  lequel  on  se  propo- 
sait  de  reformer  toute  notre  legislation  douanidre,  et  de  r<)gler 
les  rapports  commcrciaux  de  la  France  avec  ses  voisins.  Des 
n^gociations  furcnt  presque  aussitQt  entamdes ;  elles  out 
anient  la  conclusion  de  plusieurs  traitds,  d'abord,  avcc  la 
Belgique,^  puis  avec  la  Prusse  et  le  Zollverein,^  puis  avec 
ritalie  et  la  Suisse,*  enfin,  en  1865  et  1866,  avec  les  Pays-Bas, 
les  villcs  hansdatiques,  le  Mecklembourg,  la  Sudde,  I'Espagne, 
le  Portugal,  le  P<Jrou,  I'Autriche.* 

Le  Corps  Idgislatif  ne  fut  saisi  de  ces  rdformcs  qu'apres  le 
fait  accompli.^  Get  usage  des  droits  confer<;s  au  souverain 
par  le  s<inatus-consulte  du  25-30  d^cembre,  1852,  eut  le  regret- 
table effet  de  donner  b,  une  transformation  lib^rale  I'apparence 
d'un  coup  d'Etat  commercial,  et  preta  aux  partisans  de  la 
protection  leur  plus  solide  argument.  Le  gouvernemcnt  tint 
bon.  Dans  les  discussions  successives  qu'ont  amcn^cs  les 
traitds,  il  s'cst  appliqu^  constamment  k  dtablir  des  droits  de 
plus  en  plus  moddrds,  afin  de  rendre  toujours  plus  faciles  les 
relations  Internationales,'  et  quoique  la  politique  ait  rendu 

1  Le  traitd  portait  8  scli.  2  pence ;  mais  le  taux  fut  trouvc  insuflSsant  en 
Angleterre  ct  portc  h.  8  8ch.  5  p.  par  un  art.  addit  du  20  fcvrier. 

»  10  mai,  1861. 

>  24  mars  et  2  aoat,  1862, 10  mai,  1866. 

«  17  Janvier,  1864,  et  30  juin,  1864, 

*  7  juin,  1866, 11  mars,  1866,  9  juin,  1865,  4  et  30  juin,  18  juin,  1865, 11  juil- 
let,  1866;  2  de'c,  11  dec,  1866.  Voir  M.  Boiteau,  Lea  TraiUs  de  comment  et 
Exposf  de  la  sit.  de  V Empire.    {Mm.  de  janr.,  1866  et  de  fe'v.  18G7.) 

'  La  discussion  sur  les  modifications  de  tarif  du  traite  du  23  Janvier  ne 
recoromen^a  au  Corps  Mgislatif  que  le  28  avril. 

^  Ainsi,  par  exemple,  les  moderations  de  droits  porttfes  dans  le  traite  svec 
I'ltalie,  ont  ^te,  par  decret  du  20  Janvier,  1864,  appliqu^es  k  la  Belgique  et  I 
I'Angleterre. 


FRANCE  SOUS  LE  SECOND  EMPIRE. 


297 


vaine  diirant  plusieurs  ann^es  la  Convention  avcc  le  Zollverein, 
la  France  communique  aujourd'hui  avec  toutes  les  nations 
limitrophes  de  son  territoire,  sans  rencontrer  I'obstacle  insur- 
montablc  de  la  prohibition,  et  sans  avoir,  dans  la  majority 
des  cas,  c\  payer  autre  chose  qu'un  simple  droit  de  consomma- 
tion,  assez  U^^cv  en  fait,  et  legitime  en  principe. 

Ces  traites  avaicnt  fait  disparaitre  les  prohibitions.  Le 
s)st5me  protecteur  qu'elles  dtayaient,  et  dans  lequel  de  si 
larges  brcchea  dtaient  ouvertes,  devait  ndcessairement  crou- 
ler.  II  ne  restait  au  Corps  l^gislatif  qu'^  d^blayer  le  ter- 
rain ct  h  r^tablir  Tharmonie  dans  les  diverses  parties  de 
notrc  Code  douanier,  en  votaut  les  projets  que  lui  prdsentait 
Ic  gouvernemcnt.  .  .  . 


'I 


298 


ECONOMIC  HISTORY. 


xn. 

RECENT  CHANGES  IN  TRANSPORTATION  AND 

PRODUCTION. 


n      ^  (11 

^ ".  ■  III 


From  Wells'  Recent  Economic  Changes,  pp.  27-65. 

WHEN  the  historian  of  the  future  writes  the  history  of 
the  nineteenth  century  he  will  doubtless  assign  to  the 
period  embraced  by  the  life  of  the  generation  terminating  in 
1885  a  place  of  importance,  considered  in  its  relations  to  the 
interests  of  humanity,  second  to  but  very  few,  and  perhaps  to 
none,  of  the  many  similar  epochs  of  time  in  any  of  the  centu- 
ries that  have  preceded  it;  inasmuch  as  all  economists  who 
have  specially  studied  this  matter  are  substantially  agreed  that, 
within  the  period  named,  man  in  general  has  attained  to  such 
a  greater  control  over  the  forces  of  Nature,  and  has  so  com- 
passed their  use,  that  he  has  been  able  to  do  far  more  work  in 
a  given  time,  produce  far  more  product  measured  by  quantity 
in  ratio  to  a  given  amount  of  labor,  and  reduce  the  effort  nec- 
essary to  insure  a  comfortable  subsistence  in  a  far  greater 
measure  than  it  was  possible  for  him  to  accomplish  in  any 
previous  generation.    In  the  absence  of  sufficiently  complete 
data,  it  is  not  easy,  and  perhaps  not  possible,  to  estimate  accu- 
rately, and  specifically  state  the  average  saving  in  time  and 
labor  in  the  world's   work  of  production   and  distribution 
that  has  been  thus  achieved.    In  a  few  departments  of  indus- 
trial effort  the  saving  in  both  of  these  factors  has  certainly 
amounted  to  seventy  or  eighty  per  cent ;  in  not  a  few  to  more 
than  fifty  per  cent.^    Mr.  Edward  Atkinso" ,  who  has  made 

1  According  to  the  United  States  Bureau  of  Labor  (report  for  1886),  the 
gain  in  the  power  of  production  in  some  of  the  leading  industries  of  the  United 
States  "  during  the  past  fifteen  or  twenty  years,"  as  measured  by  tlie  displace- 
ment of  the  muscular  labor  formerly  employed  to  effect  a  given  result  (i-  «• 


CHANGES  IN  TRANSPORTATION. 


299 


this  matter  a  special  study,  considers  one  third  as  the  mini- 
mum average  that  can  be  accepted  for  the  period  above  speci- 
fied.^ Other  authorities  are  inclined  to  assign  a  considerably- 
higher  average.  The  deductions  of  Mr.  William  Fowler,  Fel- 
low of  University  College,  London,  are  to  the  effect  that  the 
savin*  of  labor  since  1850  in  the  production  of  any  given  arti- 
cle amounts  to  forty  per  cent;'  and  the  British  Royal  Com- 
mission (minority  report,  1886)  characterizes  the  amount  of 
labor  required  to  accomplish  a  given  amount  of  production 
and  transport  at  the  present  time  as  incomparably  less  than 
was  requisite  forty  years  ago,  and  as  "  being  constantly 
reduced." 

But  be  this  as  it  may,  out  of  such  results  as  are  definitely 
known  and  accepted  have  come  tremendous  industrial  and 
social  disturbances,  the  extent  and  effect  of  which  —  and 
more  especially  of  the  disturbances  which  have  culminated, 


amount  of  product)  has  been  as  follows  :  In  the  manufacture  of  agricultural 
implements,  from  fifty  to  seventy  per  cent;  in  the  manufacture  of  shoes, 
eighty  per  cent ;  in  the  manufacture  of  carriages,  sixty-five  per  cent ;  in  the 
manufacture  of  macliines  and  machinery,  forty  per  cent ;  in  the  silk-manuf ac- 
tare,  fifty  per  cent ;  and  so  on. 

'  In  a  print  cloth  factory  in  New  England,  in  which  the  conditions  of  pro- 
duction were  analyzed  by  Mr.  Atkinson,  the  product  per  hand  was  found  by 
him  to  have  advanced  from  26,531  yards,  representing  3,382  hours'  work  in 
1871,  to  32,391  yards,  representing  2,095  hours'  work,  in  1884,  —  an  increase  of 
twenty-two  per  cent  in  product,  and  a  decrease  of  twenty  per  cent  in  hours  of 
labor.  Converted  into  cloth  of  their  own  product,  the  wages  of  the  operatives 
iu  this  same  mill  would  have  yielded  them  6,205  yards  in  1871,  as  compared 
with  9,737  yards  in  1884, — an  increase  of  56^^  per  cent.  During  the  same 
period  of  years  the  prices  of  beef,  pork,  flour,  oats,  butter,  lard,  cheese,  and 
wool  in  tlie  United  States  declined  more  than  twenty-five  per  cent. 

A  like  investigation  by  the  same  authority  of  an  iron-furnace  in  Pennsyl- 
vania allowed  that,  ooinparing  the  results  of  the  five  years  from  1860  to  1864 
with  tlie  five  years  from  1875  to  1879,  the  product  per  hand  advanced  from  776 
tons  to  1,219  tons;  that  the  gross  value  of  the  product  remained  about  the 
same ;  tliat  tlie  number  of  hands  was  reduced  from  seventy-six  to  seventy-one ; 
and  tliat  consumers  gained  a  benefit  of  reduction  in  price  from  $27.95  per  ton 
toS19.08. 

■^  Wages  have  greatly  increased,  but  the  cost  of  doing  a  given  amount  of 
work  has  greatly  decreased,  so  that  five  men  can  now  do  the  work  which 
would  have  demanded  the  labor  of  eight  men  in  1850.  If  this  be  correct,  the 
saving  of  labor  is  forty  per  cent  in  producing  any  given  article.  —  Appreciation 
ofGM,  William  Fowler,  Fellow  of  University  College,  London,  1886. 


i'- 


800 


ECONOMIC  HISTORY. 


as  it  were,  in  later  years  —  it  is  not  easy  to  appreciate  with- 
out the  presentation  and  consideration  of  certain  typical  and 
specific  examples.  To  a  selection  of  such  examples,  out  of  a 
large  number  that  are  available,  attention  is  accordingly  next 
invited. 

Let  us  go  back,  in  the  first  instance,  to  the  year  1869,  when 
an  event  occurred  which  was  probably  productive  of  more  im- 
mediate and  serious  economic  changes  —  industrial,  commer- 
cial, and  financial  —  than  any  other  event  of  this  century,  a 
period  of  extensive  war  excepted.  That  was  the  opening  of 
the  Suez  Canal.  Before  that  time,  and  since  the  discovery  by 
Vasco  da  Gama,  in  1498,  of  the  route  to  India  by  the  Cape  of 
Good  Hope,  all  the  trade  of  the  Western  hemispheres  with  the 
Indies  and  the  East  toiled  slowly  and  uncertainly  around  the 
Cape,  at  an  expenditure  in  time  of  from  six  to  eight  months 
for  the  round  voyage.  The  contingencies  attendant  upon  such 
lengthened  voyages  and  service,  as  the  possible  interniption 
of  commerce  by  war,  or  failure  of  crops  in  remote  countries, 
which  could  not  easily  be  anticipated,  required  that  vast  stores 
of  Indian  and  Chinese  products  should  be  always  kept  on  hand 
at  the  one  spot  in  Europe  where  the  consumers  of  such  com- 
modities could  speedily  supply  themselves  with  any  article  they 
required ;  and  that  spot,  by  reason  of  geographical  position 
and  commercial  advantage,  was  England.  Out  of  this  condi- 
tion of  affairs  came  naturally  a  vast  system  of  warehousing 
in  and  distribution  from  England,  and  of  British  banking  and 
exchange.  Then  came  the  opening  of  the  canal.  What  were 
the  results  ?  The  old  transportation  had  been  performed  by 
ships,  mainly  sailing-vessels,  fitted  to  go  round  the  Cape,  and, 
as  such  ships  were  not  adapted  to  the  Suez  Canal,  an  amount 
of  tonnage,  estimated  by  some  authorities  as  high  as  two  mil- 
lion tons,  and  representing  an  immense  amount  of  wealth, 
was  virtually  destroyed.^    The  voyage,  in  place  of  occupying 

>  "The  canal  may  therefore  be  said  to  have  given  a  death-blow  to  sailinf 
vessels,  except  for  a  few  special  purposes." '—  From  a  paper  by  Charles  Mag- 
niac,  indorsed  by  the  "London  Economist"  as  a  merchant  of  eminence  anil 
experience,  entitled  to  speak  with  authority,  read  before  the  Indian  Section  of 
the  London  Society  of  Arts,  February,  1876. 


CHANGES  IN  TRANSPORTATION. 


301 


from  six  to  eight  months,  has  been  so  greatly  reduced  that 
steamers  adapted  to  the  canal  nosr  make  the  voyage  from 
London  to  Calcutta,  or  vice  versa,  in  less  than  thirty  days. 
The  notable  destruction  or  great  impairment  in  the  value  of 
ships  consequent  upon  the  construction  of  the  canal  did  not, 
furthermore,  terminate  with  its  immediate  opening  and  use  ; 
for  improvements  in  marine  engines,  diminishing  the  con- 
sumption of  coal,  and  so  enabling  vessels  to  be  not  only  sailed 
at  less  cost,  but  to  carry  also  more  cargo,  were,  in  consequence 
of  demand  for  quick  and  cheap  service,  so  rapidly  effected 
that  the  numerous  and  expensive  steamer  constructions  of 
1870-73,  being  unable  to  compete  with  the  constructions  of 
tlie  next  two  years,  were  nearly  all  displaced  in  1875-76, 
and  sold  for  half,  or  less  than  half,  of  their  original  cost. 
And  within  another  decade  these  same  improved  steamers 
of  1875-76  have,  in  turn,  been  discarded  and  sold  at  small 
prices,  as  unfit  for  the  service  of  lines  having  an  established 
trade,  and  replaced  with  vessels  fitted  with  the  triple-expansion 
engines,  and  saving  nearly  fifty  per  cent  in  the  consumption 
of  fuel.  And  now  "  quadruple-expansion  "  engines  are  begin- 
ning to  be  introduced,  and  their  tendency  to  supplant  the 
"  triple  expansion  "  is  "  unmistakable." 

In  all  commercial  history,  probably  no  more  striking  illus- 
tration can  be  found  of  the  economic  principle  that  nothing 
marks  more  clearly  the  rate  of  material  progress  than  the 
rapidity  with  which  that  which  is  old  and  has  been  considered 
wealth  is  destroyed  by  the  results  of  new  inventions  and 
discoveries.' 

Again,  with  the  reduction  of  the  time  of  the  voyage  to  the 
Eist  by  the  Suez  Canal  to  thirty  days  or  less,  and  with  tele- 
graphic communication  between  India  and  China  and  the 
markets  of  the  Western  world,  permitting  the  dealers  and 
consumers  of  the  latter  to  adjust  to  a  nicety  their  supplies 


'  In  the  last  analysis  it  will  appear  that  there  is  no  such  thing  as  fixed 
cipital ;  there  is  nothing  useful  that  is  very  old  except  the  precious  metals, 
•nil  all  life  consists  in  the  conversion  of  forces.  The  only  capital  which  is  of 
permanent  value  is  immaterial,  —  the  experience  of  generations  and  the  devel- 
opment of  science.  —  Edward  Atkinson. 


802 


ECONOMIC  HISTORY. 


w 


!1 


of  commodities  to  varying  demands,  there  was  no  longer  anv 
necessity  of  laying  up  great  stores  of  Eastern  commodities  in 
Europe  ;  and  with  the  termination  of  this  necessity,  the  India 
warehouse  and  distribution  system  of  England,  witli  all  tlio 
labor  and  all  the  capital  and  banking  incident  to  it,  substan- 
tially passed  away.  Europe,  and  to  some  extent  the  United 
States,  ceased  to  go  to  England  for  its  supplies.  If  Austria 
wants  anything  of  Indian  product,  it  stops  en  route,  by  the 
Suez  Canal,  at  Trieste;  if  Italy,  at  Venice  or  Genoa;  if 
France,  at  Marseilles ;  if  Spain,  at  Cadiz.  How  great  has 
been  the  disturbance  thus  occasioned  in  British  trade  is  shown 
by  the  following  figures :  In  1871  the  total  exports  of  India 
were  £67,556,000,  of  which  je30,737,000  went  to  the  United 
Kingdom ;  but  in  1885,  on  a  total  Indian  export  of  .£85,087,000, 
the  United  Kingdom  received  only  ^£31,882,000.  During  the 
same  time  the  relative  loss  on  British  exports  to  India  was 
less  than  a  million  and  a  half  sterling. 

As  a  rule,  also,  stocks  of  Indian  produce  are  now  kept,  not 
only  in  the  countries,  but  at  the  very  localities  of  their  pro- 
duction, and  are  there  drawn  upon  as  they  are  wanted  for  im- 
mediate consumption,  with  a  greatly  reduced  employment  of 
the  former  numerous  and  expensive  intermediate  agencies.' 
Thus  a  Calcutta  merchant  or  commission  agent  at  any  of  the 
world's  great  centres  of  commerce  contracts  through  a  cleric 
and  the  telegraph  with  a  manufacturer  in  any  country  — it 
may  be  half  round  the  globe  removed  —  to  sell  him  jute,  cot- 
ton, hides,  spices,  cutch,  linseed,  or  other  like  Indian  produce. 
An  inevitable  steamer  is  sure  to  be  in  an  Eastern  port,  ready 

»  In  illustration  of  this  curious  point,  attention  is  asked  to  the  following 
extract  from  a  review  of  the  trade  of  British  India,  for  tlie  year  1886,  from  the 
«'  Times,"  of  India,  publislied  at  Bombay :  "  What  the  mercantile  comran- 
nity  "  —  i.  e.,  of  Bombay  —  "  has  suffered  and  is  suffering  from,  is  the  very  nar- 
row margin  which  now  exists  between  the  producer  and  consumer.  Twenty 
years  ago  the  large  importing  houses  held  stocks,  but  nowadays  nearly  every- 
thing is  sold  to  arrive,  or  bought  in  execution  of  native  orders,  and  the  baiaar 
dealers,  instead  of  European  importers,  have  become  the  holders  of  itoclu. 
The  cable  and  canal  liave  to  answer  for  the  transformation ;  while  the  ease 
with  which  funds  can  be  secured  at  home  by  individuals  absolutely  destitute 
of  all  knowledge  of  the  trade,  and  minus  the  capital  to  work  it,  has  resulted  in 
the  diminution  of  profits  both  to  importers  and  to  basaar  dealers." 


CHANGES  IN  TRANSPORTATION. 


803 


to  sail  upon  short  notice ;  the  merchandise  wanted  is  bought 
by  telegraph,  hurried  on  board  the  ship,  and  the  agent  draws 
for  the  price  agreed  upon,  through  some  bank,  with  the  ship- 
ping documents.  In  four  weeks,  in  the  case  of  England,  and 
a  lesser  time  for  countries  intermediate,  the  shipment  arrives  ; 
the  manufacturer  pays  the  bill,  either  with  his  own  money  or 
his  banker's ;  and,  before  another  week  is  out,  the  cotton  and 
the  jute  are  going  through  the  factory;  the  linseed  has  been 
converted  into  oil,  and  the  hides  in  the  tannery  are  being 
transformed  into  leather. 

Importations  of  East  Indian  produce  are  also  no  longer  con- 
fined in  England  and  other  countries  to  a  special  class  of 
merchants ;  and  so  generally  has  this  former  large  and 
special  department  of  trade  been  broken  up  and  dispersed 
that  extensive  retail  grocers  in  the  larger  cities  of  Europe  and 
the  United  States  are  now  reported  as  drawing  their  supplies 
direct  from  native  dealers  in  both  China  and  India. 

Another  curious  and  recent  result  of  the  Suez  Canal  con- 
struction, operating  in  a  quarter  and  upon  an  industry  that 
could  not  well  have  been  anticipated,  has  been  its  effect  on  an 
important  department  of  Italian  agriculture,  —  namely,  the 
culture  of  rice.  This  cereal  has  for  many  years  been  a  staple 
crop  of  Italy,  and  a  leading  article  of  Italian  export,  —  the 
total  export  for  the  year  1881  having  amounted  to  83,598 
tons,  or  167,196,000  pounds.  Since  the  year  1878,  however, 
rice  grown  in  Burmah,  and  other  parts  of  the  far  East,  has 
been  imported  into  Italy  and  other  countries  of  Southern 
Europe  in  such  enormous  and  continually  increasing  quanti- 
ties, and  at  such  rates,  as  to  excite  great  apprehensions  among 
the  growers  of  Italian  rice,  and  largely  diminish  its  exporta- 
tion, —  the  imports  of  Eastern  rice  into  Italy  alone  having 
increased  from  11,957  tons  in  1878  to  68,095  tons  in  1887. 
For  Prance,  Italy,  and  other  Mediterranean  ports  east,  the 
importation  of  rice  from  Southern  Asia  (mainly  from  Burmah) 
was  152,147  tons  in  1887,  as  compared  with  about  20,000 
tons  in  1878. 

That  the  same  causes  are  also  exerting  a  like  influence  upon 
the  marketing  of  the  cereal  crops  of  the  United  States  is 


804 


ECONOMIC  HISTORY. 


shown  by  the  circumstance  that  the  freight  rates  on  the  trans- 
port of  grain  from  Bombay  to  England,  by  way  of  the  Suez 
Canal,  declined  from  32.5  cents  per  bushel  in  1880,  to  16.2 
cents  in  1885 ;  and,  to  the  extent  of  this  decline,  the  ability  of 
the  Indian  ryot  to  compete  with  the  American  grain-grower 
in  the  markets  of  Europe,  was  increased. 

How  great  was  the  disturbance  occasioned  in  the  general 
prices  of  the  commodities  that  make  up  Eastern  commerce  bv 
the  opening  of  the  Suez  Canal,  and  how  quickly  prices  re- 
sponded to  the  introduction  of  improvements  in  distribution, 
is  illustrated  by  the  following  experience :  The  value  of  tlie 
total  trade  of  India  with  foreign  countries,  exclusive  of  its 
coasting-trade,  was  estimated,  at  the  time  of  the  opening  of 
the  canal  in  1869,  at  £105,500,000  ($527,600,000).  In  1874, 
however,  the  value  was  estimated  at  only  £95,500,000,  or  at 
a  reduction  of  ten  per  cent ;  and  the  inference  might  naturally 
have  been  that  such  a  large  reduction  as  ten  millions  sterling 
(150,000,000)  in  five  years,  with  a  concurrent  increase  in  the 
world's  population,  could  only  indicate  a  reduction  of  quanti- 
ties. But  that  such  was  not  the  case  was  shown  by  the  fact 
that  250,000  tons  more  shipping  (mainly  steam,  and  there- 
fore equivalent  to  at  least  500,000  more  tons  of  sail)  was  em- 
ployed in  transporting  commodities  between  India  and  foreifrn 
countries  in  1874  than  in  1869 ;  or,  that  while  tl>e  value  of 
the  trade,  through  a  reduction  of  prices  had  notably  declined 
during  tliis  period,  the  quantities  entering  into  trade  had  so 
greatly  increased  during  the  same  time  that  250,000  tons 
more  shipping  were  required  to  convey  it. 

In  short,  the  construction  of  the  Suez  Canal  completely 
revolutionized  one  of  the  greatest  departments  of  the  worlds 
commerce  and  business ;  absolutely  destroying  an  immense 
amount  of  what  had  previously  been  wealth,  and  displacing  or 
changing  the  employment  of  millions  of  capital  and  thousands 
of  men ;  or,  as  the  London  "  Economist "  has  expressed  it, 
"  so  altered  and  so  twisted  many  of  the  existing  modes  and 
channels  of  business  as  to  create  mischief  and  confusion  "  to 
an  extent  sufficient  to  constitute  one  great  general  cause 
for  a  universal  commercial  and  industrial  depression  and 
disturbance. 


CHANGES  IN  TRANSPORTATION. 


805 


The  deductions  from  the  most  recent  tonnage  statistics  of 
Great  Britain  come  properly  next  in  order  for  consideration. 
During  tiic  ten  years  from  1870  to  1880,  inclusive,  the  British 
mercantile  marine  increased  its  movement,  in  the  matter  of 
foreign  entries  and  clearances  alone,  to  the  extent  of  22,000,- 
000  tons ;  or,  to  put  it  more  simply,  the  British  mercantile 
marine  exclusively  engaged  in  foreign  trade  did  so  much  more 
work  within  the  period  named ;  and  yet  the  number  of  men 
who  were  employed  in  effecting  this  great  movement  had  de- 
creased in  1880,  as  compared  with  1870,  to  the  extent  of  about 
three  thousand  (2,990  exactly).  What  did  it  ?  The  intro- 
duction of  steam-hoisting  machines  and  grain-elevators  upon 
tlie  wharves  and  docks,  and  the  employment  of  steam-power 
upon  the  vessels  for  steering,  raising  the  sails  and  anchors, 
pumping,  and  discharging  the  cargo  ;  or,  in  other  words,  the 
ability,  through  the  increased  use  of  steam  and  improved  ma- 
chinery, to  carry  larger  cargoes  in  a  shorter  time,  with  no 
increase  —  or,  rather,  an  actual  decrease  —  of  the  number  of 
men  employed  in  sailing  or  managing  the  vessels. 

Statistical  investigations  of  a  later  date  furnish  even  more 
striking  illustrations  to  the  same  effect  from  this  industrial 
specialty.  Thus,  for  1870,  the  numher  of  hands  (exclusive  of 
masters)  employed  to  every  one  thousand  tons  capacity,  en- 
tered or  cleared  of  the  British  steam  mercantile  marine,  is 
reported  to  have  been  forty-seven,  but  in  1885  it  was  only 
27.7;  or  seventy  per  cent  more  manual  labor  was  required  in 
1870  than  in  1885  to  do  the  same  work.  In  sailing-vessels 
the  change,  owing  to  a  lesser  degree  of  improvement  in  the 
details  of  navigation,  has  been  naturally  smaller,  but  never- 
theless considerable ;  twenty-seven  hands  being  required  in 
1885  as  against  thirty-five  in  1870  for  the  same  tonnage  en- 
tered or  cleared.^  Another  fact  of  interest  is,  that  the  recent 
increase  in  the  proportion  of  large  vessels  constructed  has  so 

'  The  official  statistics  do  not  show  in  the  British  mercantile  marine  whether 
the  economy  of  labor  which  was  efifected  prior  to  1886  lias  continued  to  be  pro- 
gressive; inasmuch  as  the  totals  for  1886-88  include  Lascars  and  Asiatics 
under  Asiatic  articles  of  agreement ;  allowing  for  this,  however,  the  proportion 
of  men  employed  to  every  one  thousand  tons  of  shipping  was  considerably 
smaller  in  the  years  1886-87  than  in  1884-85. 

20 


* 

i,    ■ 

'i 

806 


ECONOMIC  HISTORY. 


greatly  increased  the  efficiency  of  shipping,  and  so  clioapciied 
tlie  cost  of  sea-carriage,  to  the  advantage  of  both  producers 
and  consumers,  that  much  business  that  Avas  before  impossible 
has  become  quite  possible.  Of  the  total  British  tonnage  con- 
structed  in  1870,  only  six  per  cent  was  of  vessels  in  excess  of 
two  thousand  tons  burden ;  but  in  1884  fully  seventeen  per 
cent  was  of  vessels  of  that  size,  or  larger.  Meanwliile,  the 
cost  of  new  iron  (or  steel)  ships  has  been  greatly  reduced; 
from  190  per  ton  in  1872-74  to  1*65  in  1877, 157  in  1880, 
while  in  1887  first-class  freighting  screw-steamers,  constructed 
of  steel,  fitted  with  triple  compound  engines,  with  largely 
increased  carrying  capacity  (in  comparison  with  former  iron 
construction)  and  consequent  earning  power,  and  capable  of 
being  worked  at  less  expense,  could  have  been  furnished  for 
183.95  per  ton.* 

1  The  following  is  a  copy  of  a  circular  issued  in  October,  1887,  by  the  rep- 
resentatives in  New  York  of  a  well-known  iron-ship-buildii.g  firm  at  Newcastle- 
on-Tyne,  England :  — 

"Inviting  your  attention  to  the  inclosed  particulars  of  two  steel  icrew 
freiglit  steamers  building  to  our  order,  by  the  well-known  builders,  Messrs. 
^^,  of  Newcastle-on-Tyne,  we  beg  to  give  you  some  additional  details: 

"The  contract  price  is  £84,260  each,  which  is  just  about  £&  lis.  (six  pounds 
seventeen  shillings  sterling)  a  ton  dead-weight  capacity,  and  including  all  ex- 
penses up  to  time  of  delivery,  will  not  exceed  £7  a  ton  dead-weight,  or  at 
present  rate  of  exchange,  $38.96  American  money. 

"  Thus  it  will  be  seen  that  as  regards  the  cost  of  these  vessels,  while  of  Urge 
carrying  capacity  and  consequent  earning  power,  and  fitted  as  they  will  be  with 
engines  of  the  newest  type  and  with  all  modem  appliances  wliicli  have  been 
tried  and  found  conducive  to  quick  and  economical  working  (while  avoiding  all 
innovations  of  an  experimental  character),  the  present  price  of  not  over  £1  per 
ton,  dead-weight  capacity,  ns  against  £12  to  £18  a  few  years  ago,  renders  the 
difference  in  values  relatively  even  greater  than  appears  at  first  siplit." 

A  brief  examination  of  what  is  embraced  in  the  construction  of  these  vessels 
is  not  a  little  interesting  and  instructive,  especially  to  those  wlio  recall  viiat 
was  deemed  but  a  comparatively  few  years  ago  the  very  best  conditions  fo; 
ocean  steam  navigation:  Triple-expansion  engines  —  three  cylinders— of  the 
latest  and  most  approved  type.  Horse-power,  1,700.  Propeller  shifting  blades 
and  spare  set ;  each  part  of  engines  interchangeable.  Two  double-ended  steel 
boilers,  in  the  corrugated  furnaces,  to  work  at  one  hundred  and  fifty  pounds 
pressure.  Four  steam  winches  of  most  approved  pattern  and  large  power. 
Steam  steering-gear  forward,  and  powerful  hand-gear  aft.  Patent  stockless 
anchors,  working  direct  into  hawser  pipes,  effecting  great  saving  in  time,  labor, 
and  gear.  Water-ballast  in  double  bottom.  Lighthouses  on  forecastle.  Decks 
of  steel  throughout ;  height,  seven  feet,  nine  inches,  being  the  suitable  height 


CHANGES  liY  TRANSPORTATION. 


807 


Prior  to  about  tho  year  1875  ocean  steamships  had  not  been 
formidable  as  freight-carriers.  The  marine  engine  was  too 
^cavy,  occupied  too  much  space,  consumed  too  much  coal. 
For  transportation  of  passengers,  and  of  freight  having  large 
value  in  small  space,  they  were  satisfactory ;  but  for  perform- 
ing a  general  carrying-trade  of  the  heavy  and  bulky  articles 
of  commerce  they  were  not  satisfactory.  A  steamer  of  the 
old  kind,  capable  of  carrying  three  thousand  tons,  might  sail 
on  a  voyage  so  long  that  she  would  be  compelled  to  carry 
twenty-two  hundred  tons  of  coal,  leaving  room  for  only  eight 
hundred  tons  of  freight;  whereas,  at  the  present  time,  a 
steamer  with  the  compound  engines  and  all  other  modern 
improvements  can  make  the  same  voyage  and  practically 
reverse  the  figures,  —  that  is,  carry  twenty-two  hundred  tons 
of  freight  with  a  consumption  of  only  eight  hundred  tons  of 
coal.  The  result  of  the  construction  and  use  of  compound 
engines  in  economizing  coal  has  been  illustrated  by  Sir  Lyon 
Playfalr  by  the  statement  that  "  a  small  cake  of  coal,  which 
would  pass  through  a  I'ing  the  size  of  a  shilling  when  burned 
in  the  compound  engine  of  a  modern  steamboat  would  drive  a 
ton  of  food  and  its  proportion  of  the  ship  two  miles  on  its  way 
from  a  foreign  port."  Another  calculator,  says  the  London 
"  Engineer,"  has  computed  that  half  a  sheet  of  note-paper  will 
develop  sufficient  power,  when  burned  in  connection  with  the 
triple-expansion  engine,  to  carry  a  ton  a  mile  in  an  Atlantic 
steamer.  How,  under  such  circumstances,  the  charge  for  sea- 
freights  on  articles  of  comparatively  high  value  has  been  re- 
duced, is  shown  by  the  fact  that  the  ocean  transport  of  fresh 
meats  from  New  York  to  Liverpool  does  not  exceed  one  cent 
{\d.)  per  pound ;  and  including  commissions,  insurance,  and 
all  other  items  of  charge,  does  not  exceed  two  cents  (Ic?.)  per 

for  passengers,  horses  and  cattle.  Ventilation  of  holdg  specially  providetl 
through  automatic  cxiianstion  by  means  of  the  funnel.  Hatches  of  large 
dimensions  capable  of  taking  in  locomotives  or  other  large  pieces  of  machinery. 
!^ix  steel  bulldioads,  witli  longitudinal  bulkheads  throughout  holds  and  between 
decks.  Coal  consumption  twenty-two  tons  per  day.  Coal-bunkers  sufficient 
for  forty  days'  steaming;  outfit  in  sails,  steel  hawsers,  oil  and  water  tanks,  load- 
ing and  discliarging  gear,  cutlery,  plate,  china,  and  glass,  and  optician's  stores — 
all  of  the  best  makers  and  full  supply. 


W: 


808 


ECONOMIC  HISTORY. 


ti 


pound.  Boxed  moats  have  also  been  carried  from  Chicago  to 
London  as  a  regular  business  for  fifty  cents  per  100  puunds. 
In  1860  6d.  (twelve  cents)  jKjr  bushel  was  about  the  lowest 
rate  charged  for  any  length  of  time  for  the  transportation  of 
bulk  grain  from  New  York  to  Liverpool,  and  for  a  part  of  tlint 
year  the  rate  ran  up  as  high  at  ISJ*/.  (twenty-seven  cents)  per 
bushel.  But  for  the  year  188G  the  average  rate  for  the  same 
service  was  2^d.  (five  cents)  per  bushel  ;  while  in  April,  1888, 
the  rate  on  grain  from  New  York  to  Liverpool  by  steam  de- 
clined to  as  low  a  figure  as  ^il.  per  busliel  of  sixty  pounds; 
^d.  to  Antwerj),  and  \d.  to  Glasgow.  It  seems  almost  need- 
less  to  add  that  these  rates  were  much  below  the  actual  cost 
of  carriage.  In  like  manner,  the  cost  of  the  ocean  transpor- 
tation of  tea  from  China  and  Japan,  or  sugar  from  Cuba, 
or  coffee  from  Brazil,  has  been  greatly  reduced  by  the  same 
causes. 

Tiie  above  are  examples  on  a  large  scale  of  the  (listurl)inj,' 
influence  of  the  recent  application  of  steam  to  maritime  in- 
dustries. The  following  is  an  example  drawn  from  compiira- 
tively  one  of  the  smallest  of  the  world's  industries,  prosecuted 
in  one  of  the  most  out-of-the-way  places  :  The  scal-lishery  is  a 
most  important  industrial  occupation  and  source  of  sulisis- 
tencc  to  the  poor  and  scant  population  of  Newfoundland, 
Originally  it  Mas  prosecuted  in  small  sailing-vessels,  and  up- 
ward of  a  hundred  of  such  craft,  employing  a  large  number  uf 
men,  annually  left  the  port  of  St.  John's  for  the  seal-liunt. 
Now  few  or  no  sailing-vessels  engage  in  the  business;  steam- 
ers have  been  substituted,  and  the  same  number  of  seals  arc 
taken  with  half  the  number  of  men  that  were  formerly  needed. 
The  consequence  is,  a  diminished  opportunity  for  a  population 
of  few  resources,  and  to  obtain  "  a  berth  for  the  ice,"  as  it  is 
termed,  is  considered  as  a  favor. 

Is  it,  therefore,  to  be  wondered  at  that  the  sailing-vessel  is 
fast  disappearing  from  the  ocean  ;  ^  that  good  autlioiities  csti- 

>  The  statistics  of  the  world's  sliippinf;  show  that  in  1885  there  wore  2o,'M 
eailinsr-vessels,  of  11,216,618  tons;  in  1886  there  were  25,155,  of  10,411,807  tons; 
and  in  1887  there  were  23,310,  of  9,820,492.  The  decrease  in  two  years  waa 
therefore,  1,396,123,  or  12.4  per  cent. 


CIIAXGES  IN  TRANSPORTATION. 


809 


mated  in  1880  that  the  tonnage  then  afloat  was  about  twenty- 
five  |)cr  cent  in  excess  of  uU  that  was  needed  to  do  the  then 
carl) iiigtrade  of  the  world  ;  and  that  ship-owners  everywhere 
were  ununimously  of  the  opinion  that  the  depression  of  iuduB- 
try  was  universal  ? 

[During  the  year  1888,  from  causes  that  mutit  be  regarded  as 
('X(T|itii)nul  (uiul  which  will  be  hureafter  noticed),  an  increaHud 
(IfiiKiiul  fur  Hliipping  accommodation  suddenly  sprung  up,  and 
wliiili,  not  being  readily  supplied,  was  followed  by  un  almost  con- 
tinued lulviuice  in  freight  rates,  until  in  many  directions  —  i.  e., 
in  tlie  Kussian  grain  and  Eastern  trade  —  the  rise  was  etpial  to  one 
huiulri'd  per  cent  advance  upon  the  rates  current  in  1887  and  the 
early  niontlis  of  1888.  This  condition  of  affairs  in  turn  gave  a 
preat  iinpul.e  to  ship-building,  especially  in  Great  Britain,  where 
the  construction  for  1888  amounted  to  903,687  tons,  as  against 
();{7,(M)0  in  18iS7;  an  extent  of  annual  increase  that,  except  in  two 
instances,  has  never  been  exceeded.  The  additional  tonnage  thus 
suiiplied  i)roving  in  excess  of  the  world's  demand,  the  advance  in 
freijjhts'in  1888  was  in  a  great  measure  lost  in  the  first  six  months 
of  1880.] 

Great,  however,  as  has  been  the  revolution  in  respect  to 
economy  and  efficiency  in  the  carrying-trade  upon  the  ocean, 
the  revohition  in  the  carrying-trade  upon  land  during  the  same 
period  has  been  even  greater  and  more  remarkable.  Taking 
the  American  railroads  in  general  as  representative  of  the  rail- 
road system  of  the  world,  the  average  charge  for  moving  one 
ton  of  freight  per  mile  has  been  reduced  from  about  2.5  cents 
in  1809  to  1.06  in  1887 ;  or,  taking  the  results  on  one  of  the 
standard  roads  of  the  United  States  (the  New  York  Central), 
from  1.9o  in  1869  to  0.68  in  1885.1  To  grasp  fully  the  mean- 
ing and  significance  of  these  figures,  their  method  of  presen- 
tation may  be  varied  by  saying  that  two  thousand  pounds  of 
coal,  iron,  wheat,  cotton,  or  other  commodities,  can  now  be 

'  On  certain  of  the  railroads  of  the  United  States  an  even  lower  average 
rate  of  frei|flit  has  been  reported.  Thus,  for  the  year  1886  the  Michigan  Cen- 
tral Kailroad  reported  0.56  cent  as  their  average  rate  per  ton  per  mile  for  that 
year,  and  the  Lake  Shore  and  Michigan  Southern  Railroad  0.65  cent  for  like 

•ervke. 


310 


ECONOMIC  HISTORY. 


carried  on  the  best  managed  railways  for  a  distance  of  one 
mile  for  a  sum  so  small  that  outside  of  China  it  would  bo 
difficult  to  find  a  coin  of  equivalent  value  to  give  to  a  boy  as  a 
reward  for  carrying  an  ounce  package  across  a  street,  even  if 
a  man  or  boy  could  be  found  in  Europe  or  the  United  States 
willing  to  give  or  accept  so  small  a  compensation  for  such  a 
service. 

The  following  ingenious  method  of  illustrating  tlic  same  re- 
sults has  been  also  suggested :  The  number  of  miles  of  rail- 
road  in  operation  in  various  parts  of  the  world  in  1885  was 
probably  about  300,000.*  Reckoning  their  capacity  for  trans- 
portation at  a  rate  not  greater  than  the  results  actually 
achieved  in  that  same  year  in  the  United  States,  it  would 
appear  that  the  aggregate  railroad  system  of  the  world  could 
easily  have  performed  work  in  1885  equivalent  to  transporting 
120,000,000,000  tons  one  mile.  "  But  if  it  is  next  considered 
that  it  is  a  fair  day's  work  for  an  ordinary  horse  to  haul  a 
ton  6.7  miles,  year  in  and  year  out,  it  further  appears  that  the 
railways  have  added  to  the  power  of  the  human  race,  for  the 
satis '^action  of  its  desires  by  the  cheapening  of  products,  a 
force  somewhat  greater  than  that  of  a  horse  working  twelve 
days  yearly  for  every  inhabitant  of  the  globe." 

In  the  year  1887  the  freight-transportation  by  tlie  railroads 
of  the  United  States  (according  to  Poor's  "  Manual ")  was 
equivalent  to  60,061,069,996  tons  carried  one  mile  ;  while  the 
population  for  that  year  was  somewhat  in  excess  of  60,000,000. 
The  railroad  freight  service  of  the  United  States  for  1887  was 
therefore  equivalent  to  carrying  a  thousand  tons  one  mile  for 
every  person,  or  every  ton  a  thousand  miles.  The  average 
cost  of  this  service  was  about  $10  per  annum  for  every  person. 
But  if  it  had  been  entirely  performed  by  horse-power,  even 
under  the  most  favorable  of  old-time  conditions,  its  cost  would 
have  been  about  1200  to  each  inhabitant,  which  in  turn  would 
represent  an  expenditure  greater  than  the  entire  value  of  tlie 
then  annual  product  of  the  country ;  or,  in  other  words,  all 

1  The  world's  railway  mileage  for  January,  1889,  was  probably  in  excess  of 
370,000  miles.  At  the  same  date  the  telegraph  system  of  the  world  comprised 
at  least  1,000,000  miles  of  length  of  line. 


CHANGES  IN  TRANSPORTATION, 


811 


that  the  people  of  the  United  States  earned  in  1887  would  not 
par  the  cost  of  transportation  alone  of  the  amount  of  such 
service  rcudered  in  that  year,  had  it  been  performed  by  horse- 
power exclusively.* 

Less  than  half  a  century  ago,  the  railroad  was  practically 
unknown.^  It  is,  therefore,  within  that  short  period  that  this 
enormous  power  has  been  placed  at  the  disposal  of  every  in- 
habitant of  the  globe  for  the  cheapening  of  transportation  to 
him  of  the  products  of  other  people  and  countries,  and  for 
enabling  him  to  market  or  exchange  to  better  advantage  the 
results  of  his  own  labor  or  services.  As  the  extension  of 
the  railway  system  has,  however,  not  been  equal  in  all  parts 
of  the  world  —  less  than  thirty  thousand  miles  existing,  at 
the  close  of  1887,  in  Asia,  Africa,  and  Australia  combined  — 
its  accruing  benefits  have  not,  of  course,  been  equal.  And 
while  all  the  inhabitants  of  the  globe  have  undoubtedly  been 
profited  in  a  degree,  by  far  the  greater  part  of  the  enormous 
additions  that  have  been  made  to  the  world's  working  force 
through  the  railroad  since  1840,  have  accrued  to  the  benefit 
of  the  people  of  the  United  States,  and  of  Europe,  —  exclusive 
of  Russia,  Turkey,  and  the  former  Turkish  provinces  of  south- 
eastern Europe,  —  a  number  not  much  exceeding  two  hundred 
millions,  or  not  a  quarter  part  of  the  entire  population  of  the 
globe.  The  result  of  this  economic  change  has  therefore 
been  to  broaden  and  deepen  rather  than  diminish  the  lino 
of  separation  between  the  civilized  and  the  semi-civilized  and 
barbarous  nations. 

Now,  while  a  multiplicity  of  inventions  and  of  experiences 
have  contributed  to  the  attainment  of  such  results  under  this 
railroad  system  of  transportation,  the  discovery  of  a  method 

'  One  further  interesting  corollary  of  this  exhibit  is  that  the  average  return, 
in  the  form  of  interest  and  dividends,  on  the  enormous  amount  of  capital  which 
lias  been  actually  expended  in  order  that  the  present  railway  service  in  the 
United  States  may  be  performed,  cannot  be  estimated  as  in  excess  of  four  per 
cerit  per  annum  as  a  maximum. 

'^  As  late  as  1840  there  were  in  operation  only  about  2,800  miles  of  railway 
in  Ar^orica,  and  '2,130  in  Europe,  or  a  total  of  4,900  miles.  For  practical  pur- 
poses, it  may  therefore  be  said  that  the  world's  railway  system  did  not  then 
exist;  while  its  organization  and  correspondence  for  doing  full  and  efficient 
wurk  must  be  referred  to  a  much  later  period. 


ifl 

1 

Is.  i  ■ , 

B  '!>  ^  '  :■ ' 

f '      i 

HHili 

1;    'l.    :' 

L-d^.  .  . 

812 


ECONOMIC  HISTORY. 


of  making  steel  cheap  was  the  one  thing  which  was  absolutely 
essential  to  make  them  finally  possible  ;  inasmuch  as  the  cost 
of  frequently  replacing  rails  of  iron  would  have  entailed  such 
a  burden  of  expenditure  "^  to  have  rendered  the  present 
cheapness  of  railway  asportation  utterly  unattainable. 
Note,  therefore,  how  rai  '  improvements  in  processes  have 
followed  the  discovery  of  Bessemer,  until,  on  the  score  of  rel- 
ative first  cost  alone,  it  has  become  economical  to  substitute 
steel  for  iron  in  railroad  construction.  In  1873  Bessemer 
steel  in  England,  where  its  price  has  not  been  enhanced  by 
protective  duties,  commanded  $80  per  ton ;  in  1886  it  was 
profitably  manufactured  and  sold  in  tlie  same  country  for  less 
than  $20  per  ton  !  *  Within  the  same  time  the  annual  pro- 
ducing capacity  of  a  Bessemer  converter  has  been  increased 
fourfold,  with  no  increase  but  rather  a  diminution  of  the  in- 
volved labor ;  and,  by  the  Gilchrist-Thomas  process,  four  men 
can  now  make  a  given  product  of  steel  in  the  same  time  and 
with  less  cost  of  material  than  it  took  ten  men  ten  years  ago 
to  accomplish.  A  ton  of  steel  rails  can  now  also  be  made 
with  five  thousand  pounds  of  coal,  as  compared  with  ten 
thousand  pounds  in  1868. 

"The  importance  of  the  Bessemer  invention  of  steel  can  be  best 
understood  by  looking  at  the  world's  production  of  that  luetul  in 
1887.  The  production  of  Bessemer  steel  in  the  eight  chief  iron 
and  steel  producing  countries  of  the  world  amounted  in  that  year 
to  7,269,767  tons,  as  compared  with  6,034,115  tons  in  188G,  show- 
ing an  increase  of  1,260,094  tons,  or  twenty  per  cent.  The  sav- 
ing effected  by  railway  companies  by  the  use  of  Bessemer  metal 
and  the  additional  security  gained  thereby  is  shown  by  the  fact 
that  a  locomotive  on  the   Great   Northern   Railway  has  accom- 

»  The  average  price  of  iron  rails  in  Great  Britain  for  the  year  1883  was  i6 
per  ton ;  steel  rails  in  the  same  market  sold  in  1868  for  .£4  5s.  per  ton ;  and  in 
1887  sales  of  steel  rails  were  made  in  Belgium  for  £3  16s.  (.f  18.76)  i^r  ton,  de- 
liverable at  the  works.  The  average  price  of  steel  rails  in  Pennsylvania  (U.  S.) 
at  the  works,  for  1880,  with  a  tariff  on  imports  of  |17  per  ton,  was  834i  per 
ton.  Since  the  beginning  of  1888  the  manufacture  of  iron  rails  in  the  United 
States  has  been  almost  entirely  discontinued,  and  during  the  years  from  1883 
to  1888  there  were  virtually  no  market  quotations  for  them.  The  laet  recorded 
average  price  for  iron  rails  was  $45^  per  ton  in  1882. 


CHANGES  IN  TRANSPORTATION. 


313 


absolutely 
,8  the  cost 
ailed  such 

0  present 
ittalnable. 
jsscs  have 
lore  of  rel- 

substitute 
Bessemer 
hanced  by 
^86  it  was 
:ry  for  less 
unnal  pro- 

1  increased 
I  of  the  in- 
},  four  men 
3  time  and 
I  years  ago 
10  be  made 
1  with  ten 


can  be  best 

liat  metal  in 

it  chief  iron 

in  that  year 

|l88G,  show- 

The  sav 

[enior  metal 

by  the  fact 

has  accom- 

•  1883  was  jE5 
^r  ton ;  and  in 

J  jHjr  ton,  de 
|lviU)ia(U.S.) 

vas  S344  p«r 
lin  tlie  United 
^rs  from  18^ 
fiaet  recorded 


nliiihed,  with  a  moderate  train-load  of  passenger  coaches,  a  statute 
mile  in  fifty  seconds,  or  at  the  rate  of  seventy-two  miles  per  hour, 
and  makes  a  considerable  continuous  run  at  a  speed  of  one  mile  per 
jQJimtP^  — a  rate  of  railway  travelling  almost  beyond  the  dreams  or 
anticipations  of  the  renowned  George  Stephenson."  The  use  of 
steel  in  place  of  iron  in  ship-construction  may  be  said  to  date  from 
1878,  and  the  rapidity  with  which  the  former  has  replaced  the  lat- 
ter metal  is  very  remarkable.  Thus,  in  1878  "the  percentage  of 
steel  used  in  the  construction  of  steamships  in  Great  Britain  was 
only  1'09  hut  in  1887  the  percentage  of  iron  used  in  proportion  to 
steel  was  only  0'93;  or,  in  other  words,  in  1878  there  was  ninety 
times  as  much  iron  as  steel  used  for  steamers,  but  in  1887  there 
was  more  than  eight  times  the  quantity  of  steel  used  as  compared 
with  iron  for  the  same  purpose,  and,  as  regards  sailing-ships,  the 
quantity  of  steel  used  in  1887  amounted  to  practically  one  half 
that  of  iron."  —  Address  of  the  President  (Mr.  Adamson)  of  the 
British  Iron  and  Steel  Association,  May,  1888. 

The  application  and  use  of  steam  alone  up  to  date  (1889) 
has  accordingly  more  than  trebled  man's  working  power,  and 
by  enabling  him  to  economize  his  physical  strength  has  given 
him  greater  leisure,  comfort,  and  abundance,  and  also  greater 
opportunity  for  that  mental  training  which  is  essential  to  a 
higher  development.  And  yet  it  is  certain  that  four  fifths  of 
the  steam-engines  now  working  in  the  world  have  been  con- 
structed during  the  last  quarter  of  a  century,  or  since  1865. 

One  of  the  most  momentous  and  what  may  be  called  human- 
itarian results  of  the  recent  great  extension  and  cheapening 
of  the  world's  railway  system  and  service  is  that  there  is 
now  no  longer  any  occasion  for  the  people  of  any  country 
indulging  in  either  excessive  hopes  or  fears  as  to  the  results 
of  any  particular  harvest ;  inasmuch  as  the  failure  of  crops 
in  any  one  country  is  no  longer,  as  it  was,  no  later  than 
twenty  years  ago,  identical  with  high  prices  of  grain;  the 
prices  of  cereals  being  at  present  regulated,  not  within  any 
particular  country,  but  by  the  combined  production  and  con- 
sumption of  all  countries  made  mutually  accessible  by  rail- 
roads and  steamships.  As  a  matter  of  fact,  indeed,  the 
granaries  for  no  small  portion  of  the  surplus  stock  of  the 


314 


ECONOMIC  HISTORY. 


world's  cereals  are  at  the  present  time  ships  and  railroad- 
cars  in  the. process  of  movement  to  the  points  of  greatest 
demand  for  consumption.  Hence  it  is  that,  since  1870,  years 
of  locally  bad  crops  in  Europe  have  generally  witnessed  con- 
siderably  lower  prices  than  years  when  the  local  crops  were 
good,  and  there  was  a  local  surplus  for  export.^ 

In  short,  one  marked  effect  of  the  present  railroad  and 
steamship  system  of  transportation  has  been  to  compel  a  uni- 
formity of  prices  for  all  commodities  that  are  essential  to  life, 
and  to  put  an  end  forever  to  what,  less  than  half  a  century 
ago,  was  a  constant  feature  of  European  commercial  experi- 
ence, namely,  the  existence  of  local  markets,  with  widely 
divergent  prices  for  such  commodities. 

How  much  of  misery  and  starvation  a  locally  deficient  har- 
vest entailed  under  the  old  system  upon  the  poorer  classes, 
through  the  absence  of  opportunity  of  supplying  the  deficiency 
through  importations  from  other  countries  and  even  from 
contiguous  districts,  is  shown  by  the  circumstance  that  in  the 
English  Parliamentary  debates  upon  the  corn  laws,  about  the 
year  1840,  it  was  estimated  upon  data  furnished  by  Mr.  Tooke, 
in  his  "  History  of  Prices,"  that  a  deficiency  of  one-sixth  in 
the  English  harvest  resulted  in  a  rise  of  at  least  one  hundred 
per  cent  in  the  price  of  grain;   and  another  estimate  by 


il: 
I   f  ■    , 


*  A  century  ago  every  nation  of  Europe  raised  in  ordinary  years  enough 
grain  to  supply  the  needs  of  its  own  population,  and  the  circulation  of  food 
from  country  to  country,  and  from  province  to  province,  was  restricted  and 
even  generally  prohibited.  After  the  middle  of  the  eighteenth  century  there 
were  indications  that  the  domestic  growth  of  wheat  in  England  was  falling 
below  the  consumption  of  the  people ;  but  tliis  unpleasant  fact  was  studiously 
concealed  —  by  the  enormously  expensive  corn  laws,  which  on  the  one  hand 
artificially  stimulated  agriculture  and  kept  poor  lands  in  cultivation,  and,  on 
the  other,  restricted  through  high  prices  the  consumption  of  bread  — and  was 
not  openly  recognized  for  nearly  half  a  century  later.  Subsequently  the  otlkr 
nations  of  Europe,  with  the  exception  of  Russia  and  Austria-Hungary,  have 
experienced  the  same  alteration  in  their  food-producing  capacity  —  in  part  due 
to  natural  influences,  and  in  part  to  artificial  factors  —  which  have  turned  the 
attention  of  the  people  away  from  the  cultivation  of  cereals  into  employments 
that  promised  to  be  more  profitable ;  and  they  have  found  it  cheaper  to  import 
food  than  to  grow  it  themselves.  So  that  there  are  now  no  countries  in  Europe 
save  the  two  above  mentioned  that  have  a  surplus  product  of  wheat  available 
for  export. 


CHANGES  IN  TRANSPORTATION.  815 

Davcnant  and  King,  for  the  close  of  the  seventeenth  century, 
corroborates  this  apparently  excessive  statement.  The  esti- 
mate of  these  latter  authorities  was  as  follows :  — 

For  8  deficit  There  will  be  • 

«,ualto-  •  rtae  in  price  or- 

1-10 3-10 

2-10 8-10 

aio i«-io 

4-10 28-10 

5-10 45-10 

As  late  as  1817  the  difiFerence  in  Prance  between  the  highest 
and  the  lowest  prices  of  grain  in  different  parts  of  the  country 
was  45  francs  per  hectolitre.  In  1847  the  average  difference 
was  26  francs.  Since  1870  the  greatest  difference  at  any 
time  lias  not  been  in  excess  of  3.55  francs.  The  following 
table,  given  on  German  authority,  and  representing  the  price 
(in  silver  gulden  per  hectolitre)  of  grain  for  various  pe- 
riods, exhibits  a  like  progress  of  pric?  equalization  between 
nations :  — 


Pkmod. 

England. 

France. 

Belgium. 

Prussia. 

1821-'30 

1025 

735 

644 

5-65 

18;!l-'40 

060 

761 

781 

5-27 

1841-'oO 

915 

789 

7-99 

6-41 

18ol-'60 

9-40 

7-84 

965 

8-07 

1861-70 

8-80 

8-59 

9-24 

7-79 

For  grain  henceforth,  therefore,  the  railroad  and  the  steam- 
ship have  decided  that  there  shall  be  but  one  market  —  the 
world ;  and  that  the  margin  for  speculation  in  this  commodity, 
80  essential  to  the  well-being  of  humanity,  shall  be  restricted 
to  very  narrow  limits ;  the  speculator  for  a  rise  in  wheat  in 
any  one  country  finding  himself  practically  in  competition 
with  all  wheat-producing  countries  the  moment  he  undertakes 
to  advance  prices ;  while  abnormal  values  in  one  country  or 
market,  or  excessive  reserves  at  one  centre  or  another,  are 
certain  to  be  speedily  neutralized  and  controlled  by  the 
influence  of  all  countries  and  markets. 


S'i  ■" 


816 


ECONOMIC  HISTORY. 


The  movement  and  prices  of  wheat  for  the  year  1888  fur- 
nish a  most  remarkable  illustration  and  confirmatiou  of  the 
above  statements,  and  also  (as  Sir  James  Caird  has  pointed 
out)  "of  the  smoothness  (at  the  present  time)  of  the  opera- 
tions of  trade  under  natural  conditions."  During  the  eleven 
months  of  1888,  ending  November  30th,  Great  Britain  im- 
ported a  little  more  than  sixty-seven  million  hundred-weight 
of  wheat  and  flour.  In  the  corresponding  eleven  months  of 
1887  the  foreign  supply  was  practically  the  same.  Tiiere 
was,  however,  a  very  great  change  in  the  sources  of  supply. 
Thus,  in  1887,  North  and  South  America  furnished /or/^-n«n« 
million  hundred-weight  out  of  the  sixty-seven  million  hundred- 
wf'iglit  that  Great  Britain  required ;  but  in  1888  the  harvests 
of  America  were  comparatively  meagre,  and  supplied  Great 
Li't' '!i  with  hut  twenty-nine  million  hundred-weight,  leaving 
a  dt  acy  of  twenty  millions  to  be  obtained  from  other 
soui'uc.  r  -; .^ern  Europe,  and  especially  Russia,  which  were 
favored  during  the  year  1888  with  splendid  weather  and  enor- 
mous crops,  were  able  to  promptly  make  good  the  missing 
twenty  millions ;  but  the  market  changes  and  vicissitudes  of 
trade  consequent  on  such  an  extensive  transfer  of  the  British 
supplies  of  wheat  were  something  extraordinary.  Twenty 
years  ago,  had  Russia  in  any  one  year  harvested  a  surplus  of 
wheat  as  large  as  she  did  in  1888,  such  surplus,  through  an 
inability  to  cheaply  and  promptly  move  it  to  a  market,  would 
have  been  not  only  of  little  monetary  value  to  the  producer, 
but  would  probably  by  its  unsalable  presence  in  the  country 
have  considerably  lowered  the  market  price  of  so  much  of  the 
crop  as  was  required  for  home  consumption.  Under  existing 
conditions,  however,  great  gain  accrued  to  the  Russian  farmer 
and  to  all  the  interests  and  nationalities  employed  in  the 
movements  of  his  product.  A  demand  for  shipping  for  this 
special  trade,  which  could  not  at  once  be  fully  supplied,  also 
occasioned  a  quick  advance  in  ocean  freights  in  all  quarters 
of  the  globe,  in  some  instances  to  the  extent  of  one  hundred 
per  cent,  and  concurrently  a  revival  of  the  industry  of  ship- 
building. On  the  other  hand,  this  transfer  of  the  wheat- 
supply  of  Great  Britain  represented  an  immense  change  in 


CHANGES  IN  TRANSPORTATION. 


817 


the  carrying-trade  and  business  of  the  United  States ;  while 
the  American  speculator,  recognizing  the  local  deficiency  of 
the  wheat-crop  for  1888,  and  assuming  that  the  American 
supply  of  this  cereal  was  the  prime  factor  in  determining  its 
European  price,  largely  advanced  prices  (the  average  price  of 
No.  2  rod  winter  wheat  in  New  York  for  the  six  months 
ending  December,  1888,  having  been  $1.01  per  bushel,  as  com- 
pared with  84.2  cents  for  the  corresponding  period  of  1887). 
But  in  this  they  were  disappointed.  The  European  prices  did 
not  materially  advance ;  *  and  as  a  consequence,  while  the 
American  public  suffered,  "  the  British  consumer  was  enabled 
to  eat  his  loaf  at  the  same  price  or  a  less  price  than  he  did  in 
the  previous  year."  And  if  the  consumer  was  not  a  student 
of  statistics,  he  would  not  have  been  in  the  least  conscious 
that  it  was  Russian  rather  than  American  grain  from  which 
his  bread  was  manufactured.  In  short,  under  the  system  of 
commercial  freedom  which  Great  Britain  has  established,  all 
the  farming  interests  on  the  earth  grow  with  an  eye  to  the 
possible  advent  of  the  British  people  as  customers;  while 
the  latter,  on  their  part,  have  so  provided  themselves  with  the 
best  equipment  for  annihilating  time  and  distance,  that  it  is  a 
matter  of  indifference  to  them  whether  the  wheat-fields  which 
for  the  time  being  shall  have  their  preference  are  located  in 
India,  Russia,  Dakota,  South  America,  or  Australia. 

The  changes  effected  by  the  cheapened  moans  of  transpor- 
tation have  moreover  been  equalled,  if  not  surpassed,  by  thoao 
wrought  through  the  lessened  cost'  and  increased  amount  of 
production.  The  world's  total  product  of  pig-iron  increased 
slowly  and  regularly  from  1870  to  1879,  at  the  rate  of  about 
2\  per  cent  ner  annum,  but  after  1879  production  increased 
enormously,  until  in  1883  the  advance  among  all  nations  was 
82.2  per  cent  in  excess  of  the  make  of  1870,  the  increase  in 
the  product  of  the  United  Kingdom  being  43  per  cent,  and 
that  of  other  countries  139.1  per  cent  (Testimony  of  Sir  Loio- 
tUan  Bell,  British   Commission,  1886).     Such  an  increase 

'  English  wheat  sold  necember  25,  1888,  at  £1  11»  3rf.  a  quarter,  against 
i'l  lis.  2d.,  or  2}  cents  a  bushel  more  than  at  the  corresponding  date  in  1887, 
and  1«.  lOrf  less  than  in  December,  1886. 


I, 


818 


ECONOMIC  HISTORY. 


(after  1879),  justified  perhaps  at  the  moment,  was  far  in 
excess  of  the  ratio  of  increase  in  the  world's  population,  and 
for  a  term  of  years  greatly  disproportionate  to  any  increase  in 
the  world's  consumption,  and  finally  resulted  as  has  been 
before  shown  (see  Wells,  Chapter  I.),  in  an  extreme  depres- 
sion of  the  business,  and  a  remarkable  fall  of  prices. 

By  reason  largely  of  the  cheapening  of  iron  and  steel,  the 
cost  of  building  railroads  has  also  in  recent  years  been  greatly 
reduced.  In  1870-71,  one  of  the  leading  railroads  of  the 
Northwestern  United  States  built  126  miles,  which  with  some 
tunnelling,  was  bonded  for  about  $40,000  per  mile.  The  same 
road  could  now  (1889)  be  constructed,  with  the  payment  of 
higher  wages  to  laborers  of  all  classes,  for  about  $20,000  per 
mile. 

The  power  to  excavate  earth,  or  to  excavate  and  blast  rock, 
is  from  five  to  ten  times  as  great  as  it  was  when  operations 
for  the  construction  of  the  Suez  Canal  were  commenced,  in 
1859-60.  The  machinery  sent  to  the  Isthmus  of  Panama, 
for  the  excavation  of  the  canal  at  that  point  was  computed 
by  engineers  as  capable  of  performing  the  labor  of  half  a 
million  of  men. 

The  displacement  of  muscular  labor  in  some  of  the  cotton 
mills  of  the  United  States,  within  the  last  ten  years,  by  im- 
proved machinery,  has  been  from  thirty-three  to  fifty  per  cent, 
and  the  average  work  of  one  operative,  working  one  year,  in 
the  best  mills  of  the  United  States,  will  now,  according  to 
Mr.  Atkinson,  supply  the  annual  wants  of  1,600  fully  clothed 
Chinese,  or  3,000  partially  clothed  East  Indians.  In  1840 
an  operative  in  the  cotton-mills  of  Rhode  Island,  working 
thirteen  to  fourteen  hours  a  day,  turned  off  9,600  yards  of 
standard  sheeting  in  a  year;  in  1886  the  operative  in  the 
same  mill  made  about  80,000  yards,  working  ten  hours  a  day. 
In  1840  the  wages  were  $176  a  year ;  in  1886  the  wages  were 
$285  a  year. 

The  United  States  census  returns  for  1880  report  a  very 
large  increase  in  the  amount  of  coal  and  copper  produced 
during  the  ten  previous  years  in  this  country,  with  a  very 
large  comparative  diminution  in  the  number  of  hands  em- 


CHANGES  IN  TRANSPORTATION. 


819 


ployed  in  these  two  great  mining  industries ;  in  anthracite 
coal  the  increase  in  the  number  of  hands  employed  having 
been  33.2  per  cent,  as  compared  with  an  increase  of  product 
of  82.7 ;  while  in  the  case  of  copper  the  ratios  were  15.8  and 
70.8,  respectively.  For  such  results,  the  use  of  cheaper  and 
more  powerful  blasting  agents  (dynamite),  and  of  the  steam- 
drill,  furnish  an  explanation.  And,  in  the  way  of  further 
illustration,  it  may  be  stated  that  a  car-load  of  coal,  in  the 
principal  mining  districts  of  the  United  States,  can  now 
(1889)  be  mined,  hoisted,  screened,  cleaned,  and  loaded  in 
one-half  the  time  that  it  required  ten  years  previously. 

The  report  of  the  United  States  Commissioner  of  Labor  for 
1886  furnishes  the  following  additional  illustrations :  — 

*<In  the  manufacture  of  agricultural  implements,  specific  evi- 
dence is  submitted,  showing  that  six  hundred  men  now  do  the 
work  that,  fifteen  or  twenty  years  ago,  would  have  required  2,145 
men,  —  a  displacement  of  1,545. 

"Tlie  manufacture  of  boots  and  shoes  offers  some  very  wonder- 
ful facts  in  this  connection.  In  one  large  and  long-established 
manufactory  the  proprietors  testify  that  it  would  require  five  hun- 
dred persons,  working  by  hand  processes,  to  make  as  many  women's 
boots  and  shoes  as  a  hundred  persons  now  make  with  the  aid  of 
machinery,  — a  displacement  of  eighty  per  cent. 

"Another  firm,  engaged  in  the  manufacture  of  children's  shoes, 
states  that  the  introduction  of  new  machinery  within  the  past 
thirty  years  lias  displaced  about  six  times  the  amount  of  hand- 
labor  reipiired,  and  that  the  cost  of  the  product  has  been  reduced 
one  half. 

"On  another  grade  of  goods,  the  facts  collected  by  the  agents 
of  the  bureau  show  that  one  man  can  now  do  the  work  which 
twenty  years  ago  required  ten  men. 

"In  the  manufacture  of  flour  there  has  been  a  displacement  of 
nearly  three  fourths  of  the  manual  labor  necessary  to  produce  the  . 
same  product.  In  the  manufacture  of  furniture,  from  one  half  to 
three  fourths  only  of  the  old  number  of  persons  is  now  required. 
In  the  manufacture  of  wall-paper,  the  best  evidence  puts  the  dis- 
placement in  the  proportion  of  one  hundred  to  one.  In  the  manu- 
facture of  metals  and  metallic  goods,  long-established  firms  testify 
that  machinery  has  decreased  manual  labor  33 J  per  cent." 


820 


ECONOMIC  HISTORY. 


V,: 


'■in 


III  1845  the  boot  and  shoe  makers  of  Massachusetts  made 
an  average  production,  under  the  then  existing  conditions  of 
manufacturing,  of  1.52  pairs  of  boots  for  each  working  dav. 
In  1885  each  employ^  in  the  State  made  on  an  average  4.2 
pairs  daily,  while  at  the  present  time  in  Lynn  and  Haverhill 
the  daily  average  of  each  person  is  seven  pairs  per  day, 
"  showing  an  increase  in  the  power  of  production  in  forty 
years  of  four  hundred  per  cent."  ^  .  .  . 

But  in  respect  to  no  other  one  article  has  change  in  the 
conditions  of  production  and  distribution  been  productive  of 
such  momentous  consequences  as  in  the  case  of  wheat.  On 
the  great  wheat-fields  of  the  State  of  Dakota,  where  machinery 
is  applied  to  agriculture  to  such  an  extent  that  the  require- 
ment for  manual  labor  has  been  reduced  to  a  minimum,  the 
annual  product  of  one  man's  labor,  working  to  the  best  advan- 
tage, is  understood  to  be  now  equivalent  to  the  production  of 
5,500  bushels  of  wheat.  In  the  great  mills  of  Minnesota,  the 
labor  of  another  one  man  for  a  year,  under  similar  conditions 
as  regards  machinery,  is  in  like  manner  equivalent  to  the 
conversion  of  this  unit  of  5,500  bushels  of  wheat  into  a  thou- 
sand barrels  of  flour,  leaving  500  bushels  for  seed-purposes; 
and,  although  the  conditions  for  analysis  of  the  next  step  in 
the  way  of  results  are  more  difficult,  it  is  reasonably  certain 
that  the  year's  labor  of  one  and  a  half  men  more  —  or,  at 
the  most,  two  men  —  employed  in  railroad  transportation,  is 
equivalent  to  putting  this  thousand  barrels  of  flour  on  a  dock 
in  New  York  ready  for  exportation,  where  the  addition  of  a 
fraction  of  a  cent  a  pound  to  the  price  will  further  transport 
and  deliver  it  at  almost  any  port  of  Europe.* 

1  Address  by  Mr.  F.  W.  Norcross,  November,  1888,  before  the  Boston  Boot 
and  Shoe  Club. 

2  Wlien  the  wheat  reaches  New  York  city,  and  conies  into  the  possewion 
of  a  groat  baker,  who  has  established  the  manufacture  of  bread  on  a  large 
scale,  and  who  sells  the  best  of  bread  to  the  working-people  of  New  York  at 
the  lowest  possible  price,  we  find  that  one  thousand  barrels  of  flour  can  be  con- 
verted into  bread  and  sold  over  the  counter  by  the  work  of  three  persons  for 
one  year.  Let  us  add  to  the  six  and  a  half  men  already  named  the  work  of 
another  man  six  months,  or  half  a  man  one  year,  to  keep  the  machinery  in  re- 
pair, and  our  modern  miracle  is  that  seven  men  suffice  to  give  one  thousand 
persons  all  the  bread  they  customarily  consume  in  one  year.    If  to  tiiese  we 


''•■"SBW 


CHANGES  IN  TRANSPORTATION. 


821 


ctts  made 
1(1  it  ions  of 
king  day. 
vcrage  4.2 
Haverhill 
per  day, 
n  in  forty 

nge  in  the 
iductive  of 
,'heat.    On 
machinery 
he  require- 
limum,  the 
best  advan- 
jduction  of 
inesota,  the 
•  conditions 
lent  to  the 
into  a  thou- 
Vpur  poses ; 
loxt  step  in 
bly  certain 
re  —  or,  at 
ortation,  is 
on  a  dock 
ition  of  a 
transport 

Boston  Boot 

he  possession 
_ad  on  a  large 
New  York  at 
ir  can  be  con- 
le  persons  for 
I  the  work  of 
chinery  in  re- 
one  thousand 
If  to  these  we 


Here,  then,  wo  have  the  labor  of  three  men  for  one  year, 
working  with  machinery,  resulting  in  the  producing  all  the 
tiour  that  a  thousand  other  men  ordinarily  eat  in  a  year, 
allowing  one  barrel  of  flour  for  the  average  consumption  of 
each  adult.  Before  such  a  result  the  question  of  wages  paid 
in  the  different  branches  of  flour  production  and  transporta- 
tion becomes  an  insignificant  factor  in  determining  a  market ; 
and,  accordingly,  American  flour  grown  in  Dakota,  and  ground 
in  Minneapolis,  from  a  thousand  to  fifteen  hundred  miles  from 
tlic  nearest  seaboard,  and  under  the  auspices  of  men  paid  from 
a  dollar  and  a  half  to  two  dollars  and  a  half  per  day  for  their 
labor,  is  sold  in  European  markets  at  rates  which  are  deter- 
minative of  the  prices  which  Russian  peasants,  Egyptian 
"fellahs,"  and  Indian  "ryots,"  can  obtain  in  the  same  mar- 
kets for  similar  grain  grown  by  them  on  equally  good  soil, 
and  with  from  fifteen  to  twenty  cents  per  day  wages  for  their 
labor. 

On  the  wheat-farms  of  the  Northwestern  United  States  it 
was  claimed  in  1887  that,  with  wages  at  twenty-five  dollars 
per  month  and  board,  for  permanent  employes,  wheat  could  be 
produced  for  forty  cents  per  bushel ;  while  in  Rhenish  Prussia, 
with  wages  at  six  dollars  per  month,  the  cost  of  production 
was  reported  to  be  eighty  cents  per  bushel.  .  .  . 

A  great  number  of  other  similar  and  equally  remarkable 
experiences,  derived  from  almost  every  department  of  indus- 
try except  the  handicrafts,  might  be  presented ;  but  it  would 
seem  that  enough  evidence  has  been  offered  to  prove  abun- 
dantly that,  in  the  increased  control  which  mankind  has 
acquired  over  the  forces  of  Nature,  and  in  the  increased  utili- 
zation of  such  control  —  mainly  through  machinery  —  for  the 
work  of  production  and  distribution,  is  to  be  found  a  cause 
sufficient  to  account  for  most  if  not  all  the  economic  disturb- 
ance which,  since  the  year  1873,  has  been  certainly  universal 
in  its  influence  over  the  domain  of  civilization,  —  abnormal  to 
the  extent  of  justifying  the  claim  of  having  been  unprece- 

add  three  for  the  work  of  providing  fuel  and  other  materials  to  the  railroad 
and  the  baker,  our  final  result  is  that  ten  men  working  one  year  serve  bread 
to  one  tliousand,  — Edward  Atkinson,  Distribution  of  Productt, 

81 


ir^ 


})" 


822 


ECONOMIC  HISTORY. 


; 


dented  in  character,  and  which  bids  fair  in  a  greater  or  less 
degree  to  indefinitely  continue.  Other  causes  may  Imvc  and 
doubtless  have  contributed  to  such  a  condition  of  atl'airs,  but 
in  this  one  cause  alone  (if  the  influence"  *'^ferred  to  can  be 
properly  considered  as  a  unity)  it  would  a  there  has  been 
sufficient  of  potentiality  to  account  not  only  for  all  the 
economic  phenomena  that  are  under  discussion,  but  to  occa- 
sion a  feeling  of  wonder  that  the  world  has  accommodated 
itself  so  readily  to  the  extent  that  it  has  to  its  new  con- 
ditions, and  that  the  disturbances  have  not  been  very  much 
greater  and  more  disastrous. 

A  question  which  these  conclusions  will  naturally  suggest 
may  at  once  be  anticipated.  Have  not  these  same  influences, 
it  may  be  asked,  been  exerted  during  the  whole  of  tlic  present 
century,  and  in  fact  ever  since  the  inception  of  civilization; 
and  are  there  any  reasons  for  supposing  that  this  influence 
has  been  different  during  recent  years  ?  kind  and  degree 
from  what  has  been  heretofore  experien  The  answer  is, 

Certainly  in  kind,  but  not  in  degree.  ^.  world  has  never 
seen  anything  comparable  to  the  results  of  the  recent  system 
of  transportation  by  land  and  water,  never  experienced  in  so 
short  a  time  such  an  expansion  of  all  that  pertains  to  what  is 
called  business,  and  has  never  before,  as  was  premised  at  the 
outset  of  this  argument,  been  able  to  accomplish  so  much  in 
the  way  of  production  with  a  given  amount  of  labor  in  a 
given  time.  Thus  it  is  claimed  in  respect  to  the  German 
Empire,  where  the  statistics  of  production  and  distribution 
have  doubtless  been  more  carefully  studied  by  experts  than 
elsewhere,  that  during  the  period  from  1872  to  1885  there 
was  an  expansion  in  the  railroad  traffic  of  this  empire  of 
ninety  per  cent ;  in  marine  tonnage,  of  about  a  hundred  and 
twenty  per  cent;  in  the  general  mercantile  or  commercial 
movement,  of  sixty-seven  per  cent ;  in  postal  matter  carried, 
of  a  hundred  and  eight  per  cent ;  in  telegraphic  despatches, 
of  sixty-one  per  cent ;  and  in  bank  discounts,  of  two  hun- 
dred and  forty  per  cent.  During  the  same  period  popula- 
tion increased  about  eleven  and  a  half  per  cent ;  and  from 
such  data  there  has  been  a  general  deduction  that, "  if  one 


CHASGES  IN  TRANSPORTATION. 


828 


unit  of  trade  was  the  ratio  to  one  unit  of  population  in 
Germany  in  1872,  the  proportion  in  1885  was  more  than 
ten  units  uf  trade  to  one  of  population."  But,  be  this  as  it 
may,  it  can  not  be  doubted  that  whatever  has  been  the  in* 
(lustrial  expansion  of  Germany  in  recent  years,  it  has  been 
at  least  equalled  by  England,  approximated  to  by  France, 
and  certainly  surpassed  by  the  United  States.* 

Tiicrc  is  very  much  thai  contributes  to  the  support  of  the 
idea  which  has  been  suggested  by  M.  Laveleyc,  editor  of  the 
"Monitcur  dcs  Int^r6ts  Matdriels,"  at  Brussels,  that  the 
industrial  activity  of  the  greater  part  of  this  century  has 
been  devoted  to  fully  equipping  the  civilized  countries  of 
the  world  with  economic  tools,  and  that  the  work  of  the  fu- 
ture in  this  same  sphere  must  be  necessarily  that  of  r«^pair 
and  replacements  rather  than  of  new  constructions.  But  a 
more  important  inference  from  this  same  idea,  and  one  that 
fully  harmonizes  with  and  rationally  explains  the  phenomena 
of  the  existing  situation  is  that,  the  equipment  having  at  last 
been  made  ready,  the  work  of  using  it  for  production  has  in 
turn  begun,  and  has  been  prosecuted  so  efficiently  that  the 
world  has  within  recent  years,  and  for  the  first  time,  become 
saturated,  as  it  were,  under  existing  conditions  for  use  and 
consumption,  with  the  results  of  these  modern  improvements. 

Again,  although  the  great  natural  labor-saving  agencies 
had  been  recognized  and  brought  into  use  many  years  prior 
to  1870,  their  powers  were  long  kept,  as  it  were,  in  abeyance ; 
because  it  required  time  for  the  instrumentalities  or  methods, 
by  which  the  world's  work  of  production  and  distribution  was 
carried  on,  to  adjust  themselves  to  new  conditions ;  and  until 
this  was  accomplished,  an  almost  infinite  number  and  variety 
of  inventions  which  genius  had  produced  for  facilitating  and 


'  A  itatistical  exhibit  of  the  growth  of  British  indiiotrinl  interests  during 
the  reign  of  Queen  Victoria  (fifty  years),  published  in  1887,  in  connection  with 
the  "Queen's  Jubilee,"  showed  that  the  production  of  coal  has  increased  in 
Great  Britain  during  this  period  from  80,000,000  tons  to  147,000,000  tons  per 
onnum ;  and  that  manufactures  had  increased  in  about  an  equal  ratio  with  the 
output  of  coal  — that  is  to  say,  had  about  quadrupled  (four  hundred  per  cent). 
Meanwhile,  the  population  of  the  United  Kingdom  increased  only  thirty-three 
percent. 


frr- 


824 


ECONOMIC  HISTORY. 


accelerating  industrial  evolution  were  matters  of  promise 
rather  than  of  consummation.  But,  with  the  extension  of 
popular  education  and  the  rapid  di£fusion  of  intelligence,  all 
new  achievements  in  science  and  art  have  been  brought  in 
recent  years  so  much  more  rapidly  "  within  the  sphere  of  the 
every-day  activity  of  the  people  "  —  as  the  noted  German  in- 
ventor, Dr.  Verner  Siemens,  has  expressed  it  —  "  that  stages 
of  development  which  ages  ago  required  centuries  for  their 
consummation,  and  which  at  the  beginning  of  our  times 
required  decades,  now  complete  themselves  in  years,  and 
not  unfrequently  present  themselves  &t  once  in  a  state  of 
completeness." 

It  should  also  be  remembered  that  fifty  years  ago  the 
"  sciences  "  were  little  more  than  a  mass  of  ill-digested  facts 
or  "  unassorted  laws,"  and  that  in  the  departments  of  physics 
and  chemistry  comparatively  little  had  been  accomplished 
in  the  way  of  industrial  application  and  direction.  To  say, 
indeed,  what  the  world  did  not  have  half  a  century  ago  is 
almost  equivalent  to  enumerating  all  those  things  which  in 
their  understanding,  possession,  and  common  use  the  world 
now  regards  as  constituting  the  dividing  lines  between  civili- 
zation and  barbarism.  Thus,  fifty  years  ago  the  railroad  and 
the  locomotive  were  practically  unknown.  The  ocean  steam 
marine  dates  from  1838,  when  the  Sirius  and  Great  West- 
ern—  the  two  pioneer  vessels — crossed  tlie  Atlantic  to  New 
York.  Electricity  had  then  hardly  got  "  beyond  the  stage  of 
an  elegant  amusement,"  and  the  telej^raph  was  not  really 
brought  into  practical  use  before  1844.  The  following  is  a 
further  partial  list  of  the  inventions,  discoveries,  and  applica- 
tions whose  initial  point  of  "  being  "  is  not  only  more  recent 
than  the  half-century,  but  whose  fuller  or  larger  development 
in  a  majority  of  instances  is  also  referable  to  a  much  more 
recent  date:  the  mechanical  reapers,  mowing  and  seeding 
machines,  the  steam  plough,  and  most  other  eminently  labor- 
saving  agricultural  devices ;  the  Bessemer  process  and  the 
steel  rail  (1857) ;  the  submarine  and  trans-oceanic  telegraph 
cables  (1866 );  photography  and  all  its  adjuncts ;  electro-plating 
and  the  electrotype ;  the  steam-hammer,  repeating  and  breech- 


CHANGES  IN  TRANSPORTATION. 


825 


loading  fire-arms,  and  rifled  and  steel  cannon;  gun-cotton 
aud  dynamite ;  tlie  industrial  use  of  India-rubber  and  gutta- 
percha; the  steam-excavator  and  steam-drill;  the  sewing- 
machine  ;  the  practical  use  of  the  electric  light ;  the  applica- 
tion of  dynamic  electricity  as  a  motor  for  machinery ;  the 
steam  fire-engine ;  the  telephone,  microphone,  spectroscope, 
and  the  process  of  spectral  analysis;  the  polariscope;  the 
compound  steam-engine;  the  centrifugal  process  of  refining 
sugar ;  the  rotary  printing-press ;  hydraulic  lifts,  cranes,  and 
elevators  ;  the  "  regenerative  "  furnace,  iron  and  steel  ships, 
pressed  glass,  wire  rope,  petroleum  and  its  derivatives,  and 
aniline  dyes  ;  the  industrial  use  of  the  metal  nickel,  cotton- 
seed oil,  artificial  butter,  stearine-candles,  natural  gas,  cheap 
postage,  and  the  postage-stamp.  Electricity,  whicli  a  very 
feve  years  ago  was  regarded  as  something  wholly  immaterial, 
has  now  acquired  a  sufficiently  objective  existence  to  admit  of 
being  manufactured  and  sold  the  same  as  pig-iron  or  leather. 
In  short,  to  one  whose  present  memory  and  life-experiences 
do  not  extend  over  a  period  of  time  more  extensive  than 
what  is  represented  by  a  generation,  the  recital  of  the  econ- 
omic experiences  and  industrial  conditions  of  the  generation 
next  preceding  is  very  much  akin  to  a  recurrence  to  ancient 
history.  .  .  . 


If 


326 


ECONOMIC  HISTORY. 


xm. 

THE  FRENCH  INDEMNITY. 

THE  PAYMENT  OF  THE  FIVE  MILLIARDS. 
Blackwood's  Edinburgh  Magazine,  Feb.  1875,  pp.  172-187. 

AS  soon  as  it  became  known,  five  years  ago,  that  France  had 
to  hand  over  j£  200,000,000  to  Germany,  it  wns  o;cnerally 
predicted  that  the  financial  equilibrium  of  Europe  would  be  up- 
set by  the  transfer  of  so  vast  a  sum  from  one  country  to  another, 
and  that  the  whole  system  of  international  monetary  relation- 
ship would  be  thrown  into  confusion.  Appreliensions  of  an 
analogous  nature  were  abundantly  expressed  when  the  two 
French  loans  successively  came  out.  Wise  bankers  shook 
their  heads  in  Frankfort,  London,  Amsterdam,  and  Brussels, 
and  assured  their  listeners  that,  though  the  money  would  prob- 
ably be  subscribed,  it  could  not  possibly  be  paid  up  under  five 
years  at  least.  And  yet  the  whole  of  this  vast  transaction 
was  carried  out  between  1st  June,  1871,  and  5th  September, 
1873 ;  twenty-seven  months  sufficed  for  its  completion ;  and 
not  one  single  serious  difficulty  or  disorder  was  produced  by 
it.  The  fact  was  that  the  commercial  world  had  no  idea  of 
its  own  power ;  it  thought  itself  much  smaller  than  it  really 
is  ;  it  failed  altogether  to  suspect  that  its  own  curient  opera- 
tions were  already  so  enormous  that  even  the  remittance  of 
five  milliards  from  France  to  Germany  could  be  grafted  on  to 
them  without  entailing  any  material  perturbation.  Such, 
however,  has  turned  out  to  be  the  case ;  and  of  all  the  les- 
sons furnished  by  the  war,  no  other  is  more  practical  or  more 
strange.  The  story  of  it  is  told,  in  detail,  in  a  special  report 
which  has  recently  been  addressed  by  M.  Ldon  Say  to  the 
Commission  of  the  Budget  in  the  French  Chamber.    It  is  so 


THE  FRENCH  INDEMNITY. 


827 


curious  and  instructive  that  it  is  well  worth  while  to  analyze 
it.  It  may,  however,  be  mentioned,  that  the  order  of  exposi- 
tion adopted  by  M.  Say  is  not  followed  here.  To  render  the 
tale  clear  to  English  readers,  the  form  of  it  is  changed. 

But  before  explaining  the  processes  by  which  the  war  in- 
demnity was  paid,  it  will  be  useful  to  recall  the  principal 
features  of  the  position  in  which  France  was  placed  by 
her  defeat.  It  is  now  computed  that  the  entire  cost  of 
the  campaign  amounted,  directly  and  indirectly,  to  about 
£416,000,000 ;  and  this  outlay  may  be  divided  into  five  sec- 
tions,—  the  first  three  of  which  were  declared  officially  by 
the  Minister  of  Finance  in  his  report  of  28th  October,  1873, 
while  the  two  others  have  been  arrived  at  by  a  comparison 
of  various  private  calculations.  They  are  composed  as 
follows :  — 

1.  Sums  paid  by  France  for  her  own  military  operations-— 

War  expenses  to  the  end  of  1872 £76,480,000 

Food  bought  for  Paris  before  the  siege     ....  6,781,000 

Assistance  to  families  of  soldiers,  etc 2,000,000 

Balance  of  war  expenses  payable  oat  of  the  Liquida- 
tion Account         21,942,000 

Total  of  French  expenses  proper        .    .    .     £107,203,000 

2.  Sums  paid  to  Germany  — 

Indemnity         £200,000,000 

Interest  on  unpaid  instalments  of  indemnity     .    .  12,065,000 

Maintenance  of  German  army  of  occupation     .    .  9,945,000 

Taxes  levied  by  the  Germans 2,468,000 

Total  paid  to  Germany £224,478,000 


3.    Collateral  expenses  — 

Cost  of  issue  of  the  various  war  loans,  rebates  of 
interest,  exchange,  and  cost  of  remitting  the 
indemnity £25,247,000 

Loss  or  diminution  of  taxes  and  revenue  in  conse- 
quence of  the  war 14,567,000 

Total  of  collateral  expenses £39,814,000 


PI 


828 


ECONOMIC  HISTORY. 


u 


4.  RequisUtons  in  cash  or  objects  — 

Supplied  by  towus  or  individuals,  including  the 
£8,000,000  paid  by  Paris,  estimated  at      .    .         £15,000,000 

5.  Loss  of  profits  consequent  upon  the  suspension  of  trade  — 

Estimated  at £30,000,000 

R£suMiC. 

1 £107,203,000 

2 224,478,000 

3 39,814,000 

4 15,000,000 

5 30,000,000 

General  Total £416,495,000 

Now,  what  has  France  to  show  against  this  ? 

Her  annual  gains  before  the  war  were  put  by  M.  Maurice  Block 
("Europe,  Politique  et  Sociale,"  p.  317)  at  £900,000,000;  un- 
fortunately  he  does  not  tell  us  how  much  of  this  she  spends, 
and  how  much  she  lays  by  ;  but  there  is  a  prevalent  impres- 
sion in  France  that  her  annual  savings  amount  to  £80,000,000. 
We  shall  mention  presently  a  calculation  which  seems  to  in- 
dicate that,  during  the  later  period  of  the  Empire,  they  must 
have  amounted  to  a  considerably  larger  sum  than  this  ;  but  if 
we  admit  it,  for  the  moment,  as  correct,  it  would  follow  that 
the  cost  of  the  war,  in  capital,  represented  five  years'  ac- 
cumulation of  the  net  profits  of  the  country.  It  is  not,  liow- 
ever,  in  that  form  that  a  proportion  can  be  establisiied 
between  liabilities  and  resources ;  the  measurement  must  be 
made,  not  in  capital,  but  in  interest ;  for  it  is,  of  course,  in  tlie 
latter  form  alone  —  that  is  to  say,  in  new  taxation  to  pay  in- 
terest on  loans  —  that  France  now  feels  the  pressure.  That 
new  taxation,  when  completed  (it  is  not  all  voted  yet),  will 
amount  to  about  £26,000,000  a  year;  and  that  is  the  real 
sum  which  is  to  be  deducted  from  the  annual  profits  of  the 
country  in  consequence  of  the  war.  Now,  if  those  profits 
were  only  £80,000,000,  and  if  they  are  not  progressing,  but 
standing  still  at  their  previous  rate,  this  deduction  would  ab- 
sorb almost  a  third  of  them ;  but  as  they  are  continually  ad* 


THE  FRENCH  INDEMNITY. 


329 


vancing  —  as  every  branch  of  trade  ia  France  is  active  —  as 
foreign  commerce,  which  is  generally  accepted  as  a  safe  test  of 
national  prosperity,  was  one  fifth  larger  in  1873  than  in  1869 
—it  may  fairly  be  supposed  that,  after  paying  the  £26,000,000 
of  war  taxes,  France  is  effectively  laying  by  as  much  as  she 
did  in  the  best  years  before  the  war,  whatever  that  really  was. 

After  this  rough  indication  of  the  situation,  we  shall  better 
understand  the  story  of  the  five  milliards.  It  is  scarcely  pos- 
sible to  disassociate  it  from  the  general  attendant  circum- 
stances of  the  position  as  a  whole ;  the  two  should  be  kept  in 
view  together. 

The  payment  of  the  indemnity,  and  the  detailed  conditions 
under  which  that  payment  was  to  be  made,  were  stipulated  in 
the  three  treaties  or  conventions  signed  successively  at  Ver- 
sailles, Ferrieres,  and  Frankfort,  in  January,  March,  and  May, 
1871.  It  was  determined  by  the  last-named  treaty  that  "  pay- 
ments can  be  made  only  in  the  principal  commercial  towns  of 
Germany,  and  shall  be  effected  in  gold  or  silver,  in  English, 
Prussian,  Dutch,  or  Belgian  bank-notes,  or  in  commercial 
bills  of  the  first  class."  The  rates  of  exchange  on  coin  were 
fixed  at  3f.  75c.  per  thaler,  or  at  2f.  loc.  per  Frankfort  florin  ; 
and  it  was  agreed  that  the  instalments  should  be  paid  as 
follows :  — 

30  days  after  the  suppression  of  the  Commune     .  £20,000,000 

During  1871 40,000,000 

1st  May,  1872 20,000,000 

2d  March,  1874 120,000,000 

Total       £200,000,000 

The  last  .£120,000,000  were  to  bear  interest  at  5  per  cent. 

It  must  be  particularly  observed  that  no  currency  was  to 
be  "  liberative "  excepting  coin,  German  thalers,  or  German 
florins.  The  other  forms  of  money  which  the  German  Gov- 
ernment consented  to  accept  did  not  constitute  a  definite  pay- 
meat  ;  it  was  not  until  those  other  forms  were  converted  into 
their  equivalent  value  in  thalers  or  m  florins  that  the  pay- 
ment became  "  liberative."  This  was  the  essential  basis  of 
the  bargain. 


wm 


ft] 

:!f,  /:: 
■J  i'?'  ' '' 


830 


ECONOMIC  HISTORY. 


"^^ 


Furthermore,  it  was  declared  that  the  instalments  must  be 
paid  at  the  precise  dates  fixed,  neither  before  nor  afterwards ; 
and  that  no  payments  on  account  should  be  allowed.  It  was 
not  till  July,  1872,  that  leave  was  given  to  make  partial  pay- 
ments,  but  only  then  with  the  express  reservation  that  such 
partial  payments  should  never  be  for  less  than  £4,000,000  at 
a  time,  and  that  one  month's  notice  of  them  should  be  given 
on  each  occasion.  Under  no  circumstances,  from  first  to  last, 
was  any  payment  permitted  on  account. 

Two  main  conditions, therefore,  governed  the  operation:  the 
first,  that  all  payments  made  in  anything  but  coin  or  a  proper 
German  form  were  to  be  converted  into  a  German  form  at 
the  expense  of  France ;  the  second,  that  the  proceeds  of  all 
bills  or  securities  which  fell  due  prior  to  the  date  fixed  for 
an  instalment,  were  to  be  held  over  until  that  date.  The 
dates  themselves  were  ultimately  changed, — the  last  payment 
was  advanced  six  montlis ;  but,  with  two  special  exceptions, 
those  conditions  were  rigorously  enforced  throughout  the 
entire  business. 

As  the  annexation  of  Alsace-Lorraine  to  the  German 
Empire  obliged  the  Eastern  Railway  Company  of  France  to 
abandon  all  its  lines  within  those  provinces,  it  was  agreed 
that  Germany  should  pay  for  them,  that  the  price  should  be 
j£  13, 000, 000,  and  that  this  sum  should  be  deducted  from  the 
indemnity.  This  was  the  first  exception.  The  second  was 
that  Germany  consented,  as  a  favor,  to  accept  £5,000,000  in 
French  bank-notes.  By  these  two  means  the  £200,000,000 
were  reduced  to  £182,000,000.  But  thereto  must  be  added 
£12,065,000  for  interest  which  accrued  successively  during 
the  transaction,  and  which  carried  the  total  for  payment  in 
coin  or  German  money  to  £194,065,000.  And  even  this 
was  not  quite  all,  for  France  had  to  furnish  a  further  sum  of 
about  £580,000  for  exchange,  and  for  expenses  in  the  con- 
version of  foreign  securities  into  German  value.  This  last 
amount  does  not  appear  to  be  finally  agreed  between  the  two 
Governments ;  there  is  a  dispute  about  it ;  but  as  the  differ- 
ence extends  only  to  a  few  thousand  pounds,  the  final 
sum  remitted  may  be  taken  at  about  £194,645,000  or  at 


THE  FRENCH  INDEMNITY. 


881 


jC  199, 645, 000,  if  we  include  the  jES, 000,000  of  French  bank- 
notes. The  iB13, 000,000  credited  for  the  railways  carried 
the  entire  total  of  the  indemnity,  with  interest  and  ex- 
penses, to  je212,645,000. 

The  first  payment  (in  French  bank-notes)  was  made  on 
June  1,  1871.  As  the  first  loan  was  not  brought  out  until 
the  end  of  the  same  month,  £6,000,000  were  taken  for  the 
purpose  from  the  Bank  of  France ;  but  with  that  exception 
and  subject  to  temporary  advances  (as  will  be  seen  hereafter), 
the  funds  for  the  entire  outgoing  were  provided  by  the  two 
great  loans;  the  interest  was,  however,  charged  separately 
to  the  budget.  Consequently,  the  money  was  derived  suc- 
cessively from  the  following  sources  r   - 

The  value  of  the  Alsace-Lorraine  railways  .     .  £13,000,000 

Loan  from  the  Bank  of  France 5,000,000 

Out  of  the  first  loan  for  two  milliards     .     .     .  62,478,000 

Out  of  the  second  loan  for  three  milliards   .     .  120,102,000 

Out  of  the  budgets  of  1872  and  1873  (interest)  12,065,000 

Total £212,645,000 

It  is  not  necessary  to  go  into  the  details  of  the  dealings 
with  the  Bank  of  France,  of  the  subscription  of  the  loans,  or 
of  the  dates  and  proportions  of  the  payments  made  upon 
them.  It  will  suffice  to  observe,  as  regards  those  elements 
of  the  subject,  that  though  the  payments  on  the  loans  came 
in,  nominally,  before  the  dates  fixed  for  the  delivery  of  the 
corresponding  instalments  to  Germany,  they,  practically, 
were  not  always  available  in  time.  The  reason  was  that, 
though  the  actual  handing  over  to  Berlin  took  place  at  fixed 
periods,  the  remittances  themselves  were  necessarily  both 
anterior  and  continuous,  their  proceeds  being  accumulated 
by  French  agents  until  wanted.  The  result  was  that  the 
French  Ministry  of  Finance  was  under  the  necessity  of  mak- 
ing almost  constant  advances  on  account  of  those  remit- 
tances. Each  time  a  payment  was  coming  due,  the  means 
of  effecting  it  had  to  be  arranged  long  beforehand.  It  is 
not  possible  to  collect  or  carry  £20,000,000  at  a  week's 
notice,  so  the  Treasury  was  of  course  obliged  to  keep  on 


832 


ECONOMIC  HISTORY. 


buying  bills  as  fast  as  it  could  get  them,  in  order  to  have  a 
stock  in  hand  for  future  needs.  That  stock  fluctuated  a 
good  deal,  and  there  is  some  contradiction  in  M.  Lduu  Suy's 
report  as  to  its  amount;  but  it  appears,  at  one  period,  to 
have  ranged  for  months  as  high  as  JE  80, 000, 000,  part  of  the 
cash  to  pay  for  it  being  provided  temporarily,  until  the  loan 
moneys  came  in,  either  by  Exchequer  bills  or  by  the  Bank 
of  France  in  notes. 

There  was,  moreover,  towards  the  end  of  the  operation,  an 
advance  made  specially  in  gold  by  the  Bank  of  France ;  and, 
as  the  circumstances  under  which  it  was  effected  present  a 
certain  interest,  it  will  be  worth  while  to  state  them.  In 
May,  1873,  the  French  Treasury  had  before  it  the  obligation 
of  providing  £40,000,000  between  5th  June  and  5th  Septem- 
ber; j6  24, 000, 000  of  bills  were  in  hand  for  the  purpose,  and 
about  £10,000,000  of  instalments  were  coming  due  on  the 
loan;  but  there  was,  at  the  best,  a  clear  deficit  of  about 
£6,000,000  in  the  resources  available.  The  Bank  of  France 
agreed  to  supply  that  sum ;  but  as,  at  that  very  moment,  the 
circulation  of  its  notes  had  reached  £112,000,000,  and  as  it 
had,  consequently,  only  a  margin  of  £16,000,000  between 
that  figure  and  its  total  authorized  issue  of  £128,000,000,  it 
seemed  dangerous  to  withdraw  £6,000,000  of  that  margin  in 
notes,  and  it  was  decided  to  effect  the  loan  by  preference  in 
gold.  It  is  worth  remarking  that  this  is  probably  the  first 
example,  in  the  history  of  national  banks,  of  a  bank  electing 
to  make  an  advance  in  gold,  as  being  less  "  dangerous  "  than 
the  delivery  of  its  own  notes.  The  French  Treasury  was  of 
course  well  pleased  to  obtain  bullion,  which  was  immedi- 
ately "liberative,"  instead  of  notes,  which  would  have  had 
to  be  converted  into  bills  at  various  dates.  But,  after  all, 
this  aid  did  not  suffice ;  the  incomings  from  the  loan  did  not 
arrive,  practically,  in  time  for  use,  and  the  Treasury  had  to 
supply  a  further  final  balance  of  £9,760,000  to  enable  the 
concluding  payment  to  Germany  to  be  regularly  effected. 

Finally,  it  may  be  noted  that  there  were  thirty-three  de- 
liveries to  Germany,  the  component  parts  of  each  of  which 
were  so  scrupulously  verified  by  the  representatives  of  the 


iiipi. 


THE  FRENCH  INDEMNITY. 


883 


Berlin  Finance  Department  that  several  days  were  occupied 
by  the  counting,  on  each  occasion.  Indeed,  when  thalcrs 
had  tu  be  tuld  up,  the  maximum  got  through  in  a  day  never 
exceeded  ^32,000. 

After  these  preliminary  explanations  we  can  now  begin  to 
show  the  means  by  which  the  transfer  was  performed.  We 
will  divide  them,  in  the  first  instance,  into  four  categories :  — 

1.  German  bank-notes  and  money  collected  in 

France  after  the  war £4,201,000 

2.  French  gold  and  silver 20,492,000 

3.  French  Bank  notes 5,000,000 

4.  Bills 109,952,000 

Total £199,645,000 

The  first  observation  to  be  made  here  is  that  the  German 
money  found  in  France  amounts  to  a  singularly  large  sum ; 
indeed,  if  this  proof  of  its  importance  had  not  been  furnished 
no  one  could  possibly  have  suspected  that  the  invaders,  for 
their  personal  and  private  necessities,  had  spent  anything 
like  so  much.  Their  wants,  as  soldiers,  were  supplied  dur- 
ing the  war,  either  by  stores  sont  from  Germany  or  by  requi- 
sitions levied  in  France;  until  peace  was  signed  they  paid 
for  no  objects  of  public  or  official  need ;  all  this  cash  repre- 
sented, therefore,  individual  expenditure.  And  manifestly 
the  real  total  must  have  been  still  larger.  It  cannot  be 
supposed  that  the  whole  of  the  German  money  spent  in 
France  was  reserved  by  its  French  proprietors  for  sale  to 
their  own  Government ;  it  may  be  taken  for  granted  that  a 
considerable  portion  of  it  went  back  straight  to  Germany 
through  ordinary  channels ;  and  it  may  be  guessed  that  the 
entire  sum  expended  by  the  conquerors,  out  of  their  individ- 
ual resources,  in  German  money,  was  at  least  a  half  more 
than  the  amount  here  shown,  and  that  it  consequently  at- 
tained £(5,000,000.  The  question  is  curious,  and  this  is  the 
first  time  that  any  official  information  bearing  on  it  has  been 
published.  It  remains  to  add,  as  regards  this  element  of 
the  payment,  that,  as  might  have  been  expected,  the  German 
money  was  included,  almost  entirely,  in  the  earlier  install 


i't;; 


: 


M 


\lr 


884 


ECONOMIC  HISTORY. 


ments,   and  that  scarcely  any  of  it  appeared  in  the  later 
remittances. 

The  £20,492,000  of  French  money  was  composed  of 
£10,920,000  in  gold  and  £9,672,000  in  silver.  But  It 
should  be  said  at  once  that  these  figures  express  only  the 
amounts  transmitted  by  the  French  Government  officially, 
and  do  not  comprise  the  quantities  of  French  gold  bought  by 
Germany  or  forwarded  by  private  bankers  to  cover  their  own 
bills;  these  other  quantities  will  be  referred  to  presently. 
£6,000,000  of  the  Government  gold  were  supplied  by  the 
Bank  of  France;  the  rest  wis  bought  from  dealers  or  fur- 
nished by  the  Treasury.  Of  the  silver  £5,840,000  were 
obtained  in  France,  and  £8,782,000  were  drawn,  in  bars, 
from  Hamburg,  and  coined  in  Paris. 

But  these  direct  remittances  of  German  and  French  cash 
represented  after  all  only  about  one  eighth  of  the  entire  pay- 
ment; the  other  seven  eighths  were  transferred  by  bills,  and 
it  is  in  this  section  of  the  matter  that  its  great  interest  lies. 
It  will  at  once  be  seen  that,  as  no  remittance  in  paper  became 
"  liberative  "  until  it  was  converted  into  an  equivalent  value 
in  thalers  or  in  florins,  the  French  Treasury  could  obtain  no 
receipt  for  an  instalment  until  all  its  various  elements  had 
been  so  converted;  its  object,  therefore,  was  to  obtain  the 
largest  possible  amount  of  bills  on  Germany,  so  that,  at  their 
maturity,  their  proceeds  migh*.  be  at  once  available  in  the 
prescribed  form.  But  at  the  same  time  it  was  quite  iio- 
possible  to  collect  in  France  alone,  within  the  time  allowed, 
anything  approaching  to  the  quantity  of  German  bills  re- 
quired. The  result  was  that  it  was  found  necessary  not 
only  to  hand  in  a  large  amount  of  bills  on  other  countries, 
which  had  to  be  converted  into  German  values  at  the  cost 
of  France,  but  also,  as  regards  the  purchase  of  direct  bills 
on  Germany,  to  effect  it  frequently  in  two  stages.  In  the 
first  stage  bills  were  bought  in  Paris,  as  they  offered,  on 
England,  Belgium,  or  Holland;  in  the  second,  a  portion 
of  the  proceeds  of  those  bills  was  reinvested,  in  those  coun- 
tries, in  other  bills  on  Germany  itself.  Of  course  the 
French  Government  was  very  anxious  to  employ  every  sort 


THE  FRENCH  INDEMNITY. 


835 


of  means  to  increase  the  quantity  of  German  bills,  and  to 
avoid  leaving  to  the  German  Treasury  the  right  of  convert- 
ing foreign  paper  into  German  value  at  French  expense.  At 
the  origin  of  the  operation  the  importance  of  this  element  of 
it  was  not  fully  realized;  but  by  degrees  the  French  minister 
discovered  that  it  was  far  more  advantageous  to  e£fect  his 
conversions  himself  than  to  leave  them  to  bo  carried  out 
anyliow  at  Berlin.  The  result  of  this  discovery  was  that, 
while  ^£454, 000  were  paid  to  Germany  for  the  cost  of  con- 
version on  the  first  two  milliards,  only  £11,000  were  paid  to 
her  under  the  same  head  on  the  remaining  three  milliards. 
After  the  experience  of  the  first  twelve  months,  France  sought 
for  bills  on  Germany  wherever  she  could  get  them  all  over 
Europe ;  and  it  may  be  added  that  she  was  somewhat  aided 
in  the  effort  by  the  special  position  of  Germany,  who,  at  the 
moment,  was  in  debt  considerably  to  England  not  only  for 
the  war  loans  she  had  issued  there,  but  also  on  commercial 
account  as  well.  But,  as  has  just  been  mentioned,  a  good 
many  of  these  bills  were  substitutions  for  each  other,  and 
consequently  the  amount  of  paper  shown  as  bought  is  con- 
siderably larger  than  the  real  sum  paid  to  Germany,  the 
reason  being  that  a  good  deal  of  it  appears  in  the  account 
twice  over.  The  following  table  gives  the  composition  of 
the  total  quantity  of  bills  bought  by  France :  — 

Bills  on  Germany,  bought  direct,  in  thalers     .  £63,550,000 

"     '«         "             "          "       in  florins     .  9,548,000 
"     "        "         bought,  in  thalers,  with  the 

proceeds  of  other  bills     .  42,218,000 

••     ••         •«         in  reichsmarcs 3,172,000 

*'     "  England,  in  sterling 81,780,000 

"     "  Hamburg,  in  marcs-banco    ....  21,432,000 

"     "  Belgium,  in  francs 20,856,000 

•'     "  Holland,  in  florins 12,9:2,000 

Total £234,508,000 

These  bills  were  paid  for  mainly  in  French  bank-notes; 
and  the  average  rates  of  exchange  at  which  they  were  bought 
came  out  as  follows,  for  the  entire  operation :  — 


886  ECONOMIC  HISTORY. 

Vniiet. 

Thalera 3.7010 

Pounds  sterling 25.4043 

Maros-banco 1.0089 

Belgian  francs l.UOOl 

Dutch  florina 2.1oU0 

Frankfort  florins 2.1G37 

Ueiclismarcs 1.2528 


Every  one  at  all  acquainted  with  exchanges  will  recognize 
how  low,  under  such  circumstances,  these  prices  arc;  and 
will  ask,  with  wonder,  how  they  can  have  been  kept  down  to 
such  averages  on  so  large  an  undertaking. 

But  though  the  foregoing  table  shows  the  quantities  of 
bills,  of  each  kind,  that  were  bought  by  the  French  Govtrn- 
ment  as  vehicles  of  transmission,  it  in  no  way  indicates  the 
form  in  which  the  money  was  in  reality  handed  over  to  the 
German  Treasury.  Most  of  the  above  figure*:  wore  largely 
modified  by  conversions  and  substitutions;  and  when  all  the 
bills  had  been  cashed,  when  the  whole  payment  had  been 
effected,  it  appeared  that  the  real  totals  of  each  sort  of  cur- 
rency which  had  been  finally  delivered  to  Germany  were  as 
follows :  — 

French  bank-notes £5.000.000 

•»      gold 10,02(1.000 

••       silver 9.572.000 

German  notes  and  cash 4,201,000 

Bills  — Thalers 99,412,000 

"    —Frankfort  florins 9.404,000 

♦'    —Marcs-banco 10,008,000 

"    —  Reichsmarcs :?,  100,000 

"    —Dutch  florins O.OJO,000 

"    —  (and  in  silver)  — Belgian  frn  11,W8,000 

«*    —Pounds  sterling    .  25,490,000 

Total £li>9,645,000 


This  catalogue  shows  at  last  in  \n  luvt  shape  the  bills  were 
really  utilized  and  made  "  liberative, "  either  in  Gei  n 
money  direct,  or  by  the  equivalent  of  foreign  value  in  tl  s 
or  florins.     The  differences  of  composition  between  V        !i- 


THE  FRENCH  INDEMNITY. 


887 


nitivc  list  and  that  of  the  bills  originally  bought  are  only 
]iartially  explained  by  M.  Ldon  Say;  it  is  not,  however, 
necessary,  nor  would  it  bo  interestini^,  to  follow  out  precisely 
the  various  conversions  which  took  place;  wo  will  only  men- 
tion, as  an  illustration,  that  out  of  the  £01,780,000  of  original 
bills  in  England  j£ 31,687,000  were  converted  hero  into  other 
bills  on  ^Germany,  that  X 25,490,000  were  sent  to  Berlin  in 
sterling  bill,  and  that  the  balance  remains  unexplained.  As 
regards  the  direct  delivery  by  France  herself,  of  English, 
Belgian,  or  Dutch  bullion,  the  report  says  nothing;  it  Is 
only  stated  incidentally  that  £720,000  of  Belgian  francs 
were  sent  to  Berlin  in  metal,  and  that  the  London  agency  of 
tlie  French  Treasury  bought  £1,182,000  hero  in  gold  and 
silver,  which  probably  was  also  shipped  to  Berlin  ;  but  these 
are  the  sole  allusions  to  the  subject.  It  is  probable,  as  in- 
deed has  always  been  supposed,  that  the  bullion  which  was 
withdrawn,  during  the  operation,  from  London,  Brussels, 
and  Amsterdam,  was  not  taken  for  French  account,  but  by 
Germany  out  of  the  sums  at  her  disposal  in  each  place  after 
the  bills  on  that  place  had  matured. 

We  have  now  before  us,  in  a  condensed  form,  the  main 
elements  of  this  prodigious  operation  ;  we  see  now  what  were 
the  conditions  which  regulated  it,  where  the  money  came 
from  to  realize  it,  how  that  money  was  successively  employed, 
and  in  what  shapes  the  payments  were  at  last  effected. 

We  recognize  that  France  herself  provided,  in 

her  own  notes  and  coin  .     .     .       £25,492,000 

'•        "        that  German  money  and  bills  on 

Germany  produced   ....       126,815,000 

"        ♦*        that  bills  on  England,  Belgium, 

and  Holland  contributed     .    .         47,838,000 


Total £199,645,000 

Here,  however,  we  must  repeat  that  the  Paris  bankers  who 
sold  drafts  on  Germany  were  obliged  to  some  extent  to  remit 
cash  to  meet  them.  On  this  point  M.  L^on  Say  goes  into 
calculations  which  we  will  mention  presently ;  for  the  mo- 
ment it  will  suffice  to  say  that,  according  to  his  view,  the 

22 


Iff 


11:' 


sr>8 


ECONOMIC  HISTORY. 


m 


S'-m 


effective  transmission  of  bullion  from  France  to  Germany 
through  private  hands,  from  1871  to  1873,  did  nut  exceed 
£  8, 000, 000  for  the  purposes  in  view  here.  He  acknowledges 
as  will  be  seen,  that  the  entire  exportation  of  French  gold 
during  the  three  years  reached  (probably)  j£40,000,000;  but 
still  he  expresses  the  opinion  that  £8,000,000  were  all  that 
was  required,  as  a  balance,  to  cover  the  French  bills  on 
Berlin.  Of  course  this  is  a  question  which  nobody  can  de- 
cide ;  but,  to  lookers  on,  it  does  seem  somewhat  contrary  to 
the  probabilities  of  such  a  case  that  this  sum  can  have  been 
sufficient.  It  may,  perhaps,  have  been  enough,  as  M.  Say 
says,  to  balance  accounts  in  the  long  run,  but  it  is  difficult 
to  believe  that  it  was  not  considerably  exceeded  while  the 
operation  was  under  execution.  Furthermore,  M.  L^on  Say 
makes  a  mistake  of  £10,000,000  in  his  account,  as  we  shall 
show,  and  for  that  reason,  we  believe  that  £18,000,000 
instead  of  £8,000,000  were  required,  so  putting  the  whole 
total  of  French  bullion  temporarily  used,  including  the 
£20,000,000  of  the  Government,  at  about  £38,000,000,  or 
a  little  more  than  onj-sixth  of  the  entire  sum  to  pay.  As 
this  is  certainly  a  maximum,  it  follows  that  France  got  out 
of  this  great  debt  with  a  payment  of  only  18  per  cent  of  it, 
at  the  outside,  in  her  own  money.  And  there  is  good  rea- 
son to  suppose  that  all  the  gold  exported  by  her  has  come 
back,  and  that  her  reserves  of  bullion  are  reconstituted  at 
present  as  they  were  before  the  war. 

And  now  we  can  approach  the  most  important  and  inter- 
esting point  in  the  whole  transaction.  How  came  it  that 
£170,000,000  of  bills  could  be  got  at  all  ?  We  have  given  a 
general  answer  to  the  question  at  the  commencement  of  this 
article ;  we  will  now  consider  it  more  in  detail,  partly  with 
the  aid  of  M.  L^on  Say's  report,  partly  by  reference  to  other 
sources  of  information.  It  appears,  as  might  have  b>.'en  ex- 
pected, that  various  measures  were  employed  by  the  French 
Government  in  order  to  render  possible  the  collection  of 
such  a  huge  mass  of  paper.  In  the  first  place,  particular 
facilities  and  temptations  were  offered  to  foreigners  to  in- 
duce them  to  subscribe  to  the  two  loans ;  commissions  vary- 


THE  FRENCH  INDEMNITY. 


839 


m<f  from  |  to  1  per  cent  were  offered  to  them,  the  object  be- 
in"'  to  acquire  the  power  of  drawing  on  them  for  the  amount 
of  their  instalments.  Secondly,  everything  was  done  to  en- 
courage anticipated  payments  of  those  instalments,  so  as  to 
iiasten  the  dates  at  which  they  could  be  drawn  for.  Thirdly, 
as  some  fear  was  felt  that  the  second  loan  might  possibly  not 
be  eagerly  subscribed,  coming  as  it  did  so  immediately  after 
a  previous  issue  which  was  not  quite  paid  up,  it  was  thought 
desirable  to  get  a  portion  of  it  guaranteed  by  bankers.  But 
in  order  not  to  risk  giving  to  those  bankers  a  large  commis- 
sion for  nothing,  it  was  stipulated  with  them,  as  a  part  of 
the  arrangement,  that  they  should  supply  the  Treasury  with  a 
fixed  quantity  of  foreign  bills.  By  the  two  former  plans  of 
action  the  immense  amount  of  j670, 920,000  of  drafts  on 
other  countries  was  obtained,  £15,960,000  of  which  were  on 
account  of  the  first  loan,  and  £54,960,000  on  account  of  the 
second ;  and  it  may  be  remarked  at  once,  before  we  proceed, 
that  though  this  figure  supplies  decisive  evidence  of  the  fact 
that  at  least  one  third  of  the  two  great  loans  was  paid  up 
by  foreign  subscribers,  it  is  certain  that  nearly  the  entire 
amount  has  been  bought  back  since,  and  that  almost  the 
whole  of  the  new  stocks  is,  at  the  present  moment,  in  French 
hands.  By  the  third  plan  the  bankers  who  formed  the  syn- 
dicate, and  it  may  be  mentioned  that  fifty-five  of  the  first 
houses  in  Europe  were  associated  for  the  purpose,  engaged 
to  supply  .£28,000,000  of  paper.  Consequently,  by  these 
admirably  devised  schemes,  £98,920,000  of  drafts  wore 
successively  procured,  and  the  exact  quantity  to  be  bought 
in  the  open  market  was  reduced  to  £71,032,000. 

It  must,  however,  be  observed  that,  though  we  can  regard 
these  drafts  on  foreign  countries  for  loan  instalments  as  a 
special  product  of  the  occasion,  and  are  therefore  justified  in 
counting  them  apart,  the  same  cannot  anyhow  be  siiid  of  the 
.£28,000,000  of  bills  furnished  by  the  syndicate  of  bankers. 
The  latter  were  evidently  composed  of  ordinary  commer- 
cial paper,  and  consequently  must  be  added  to  the  total 
Tvhich  had  to  be  supplied  from  commercial  sources  proper, 
80  putting  that  total  at  £99,032,000.     Now  bills  of  this 


m 


f3  i'' 


■-]■• 


840 


ECONOMIC  HISTORY. 


sort  necessarily  imply  an  effective  counter-value  of  some 
kind ;  so,  as  we  have  already  seen  that  at  the  outside  only 
jE  18, 000, 000  of  that  counter- value  was  supplied  in  bullion, 
there  remained  at  least  .£81,032,000  of  bills  which  must 
necessarily  have  l)een  based  on  ordinary  trading  or  financial 
operations.  What  were  those  operations  ?  Very  often  the 
general  character  of  a  bill  is  indicated  on  its  face ;  l)ut  in 
this  case  a  test  of  that  kind  could  not  be  applied,  not  only 
because  there  were  so  many  bills  to  handle  that  a  serious  ex- 
amination of  their  nature  was  impracticable  (there  were  in 
all  one  hundred  and  twenty  thousand  of  them,  of  every  con- 
ceivable amount,  from  ,£40  to  £200,000),  but  also  because 
every  possible  kind  of  business  transaction  must  have  I.  ^n 
represented  in  that  accumulation  of  securities  from  all  parts 
of  the  world.  Bank  credits,  circulation  bills,  settlements  for 
goods  delivered,  remittances  on  account  of  future  purchases, 
drafts  against  the  coupons  of  shai'cs  and  stocks,  special  paper 
created  for  the  occasion, —  all  these  forms,  and  many  others, 
too,  were,  according  to  M.  Ldon  Say,  included  in  the  collec- 
tion. It  was  not  possible  to  seek  out  in  detail  the  oriuinsand 
meanings  of  such  a  varied  mass ;  but  we  may  take  M.  Say's 
general  description  of  it  to  be  true,  not  only  because  it  cor- 
responds with  probabilities  and  experience,  but  also  hccause 
ho  was  himself  Minister  of  Finance  during  a  part  of  the 
opcrntion,  and  has  therefore,  a  personal  knowledge  of  its 
main  circumstances.  Researches,  however,  which  could  not 
be  attempted  with  the  bills  themselves,  may  be  i)ractically 
and  usefully  pursued  if  they  are  directed  towards  the  jicneral 
signs  and  symptoms  of  the  financial  state  of  France.  It  is 
probable  that  a  relatively  small  amount  of  bills  was  cioatcd 
specially  to  be  sold  to  the  French  Government.  We  ui.iy, 
indeed,  take  the  supposed  £18,000,000  of  exported  hiiHion 
as  indicating  the  approximate  extent  of  Tmeovtrcd  or 
manufactured  paper;  all  the  rest  was  evidently  based  r,n 
mercantile  transactions.  Now,  we  know  that  nu'rcautilc 
transactions  imply  the  delivery  of  property  of  some  kind. 
and  that  the  two  main  forms  of  property,  commercially,  me 
merchandise  and  stocks.     It  is  therefore  necessary,  in  order 


THE  FRENCH  INDEMNITY. 


841 


to  arrive  at  an  idea  upon  the  question,  to  glance  at  the  ac- 
tual position  of  France  in  her  dealings  with  other  nations  in 
these  two  values. 

We  have  already  alluded  to  the  development  of  French 
trade,  and  to  the  general  influence  of  that  development  on 
the  payment  of  the  war  indemnity  as  a  whole ;  but  we  must 
go  into  a  few  figures  here  in  order  to  make  the  bearings 
of  the  subject  clear.  The  value  of  the  foreign  commerce 
of  France  —  importations  and  exportations  together  — 
was  £257,000,000  in  1871,  £293,000,000  in  1872,  and 
£301,000,000  in  1873.  Now  it  will  bo  at  once  recognized 
that  the  amount  of  bills  necessitated  by  this  quantity  of 
commerce  supplied  a  solid  foundation  for  carrying  the  addi- 
tional paper  whose  origin  we  are  now  seeking  to  discover. 
M.  Say  is  of  opinion  that  scarcely  any  part  of  the  indemnity 
bills  was  furnished  by  the  current  commercial  trade  of  the 
country ;  but,  as  we  have  just  seen  that  the  quantity  required 
from  trading  sources  was  £81,000,000,  or  about  £40,000,000 
per  annum,  it  does  seem  to  be  possible,  notwithstanding  his 
contrary  impression,  that  some  portion  of  that  relatively 
reduced  quantity  may  have  been  found  in  the  ordinary  com- 
mercial movement.  For  instance,  it  may  reasonably  be 
argued  —  as  indeed  M.  Say  himself  admits  —  that  bills 
drawn  against  French  exports  to  Germany  or  England  would 
be  included,  to  some  extent,  among  those  which  were  offered 
to  the  Government.  There  seems  to  be  no  reason  why  this 
should  not  have  been  so. 

But  if  M.  Say  considers  that  the  habitual  commercial 
paper  of  France  has  not  been  of  much  service  to  the  Treas- 
ury in  its  conduct  of  this  operation,  he  holds  a  totally  differ- 
ent opinion  with  reference  to  the  influence  of  the  foreign 
investments  of  the  French  people.  What  he  says  on  this 
sibject  is  new  and  curious,  and  is  well  worth  repeating. 

He  begins  by  stating,  with  an  appearance  of  much  truth 
ana  reason,  that  for  many  years  before  the  war,  French 
capital  was  being  continuously  invested  in  foreign  securities,; 
that  the  sums  so  placed  have  been  estimated  by  different 
economists  at  from  £30,000,000  to   £60,000,000  a  year. 


842 


ECONOMIC  HISTORY. 


Here,  however,  before  we  follow  out  his  argument,  we  must 
open  a  parenthesis,  and  observe  that  if  even  the  smaller  of 
these  figures  is  exact,  the  computation  of  £80,000,000  of 
annual  savings,  which  was  alluded  to  at  the  commencement 
of  this  article,  must  be  altogether  wrong.     It  is  manifestly 
inadmissible  that  France  can  have  been  investing  in  foreign 
countries  three  eighths   of    her  whole  net  yearlj'  profits. 
Consequently,  we  may  legitimately  suppose  that  the  popular 
impression  about  the  £80,000,000  is  a  delusion,  and  that 
France  is  in  reality  laying  by  a  vast  deal  more  than  that. 
If  so,  the  ease  and  speed  with  which  she  has  recovered  from 
the  war  would  be  comprehensibly  explained.     M.  L(5on  Say 
goes  on  to  tell  us  that  French  investments  in  foreign  stocks 
amounted  in  1870  to  so  large  a  total  that  the  dividends  on 
them  represented,  at  that  date,  about  £25,000,000  a  year, 
for  which  sum  drafts  on  other  countries  were  of  course  put 
into  circulation  by  its   French   proprietors.      Furthermore, 
the  revenues  of  the  strangers  who  live  in  France  come  to 
them  principally  from  their  own  country;  and  it  is  estimated 
that  before  the  war  £10,000,000  or  £12,000,000  of  such 
incomes  were  drawn  for  annually  in  the  same  way.    Conse- 
quently, on  this  showing  it  would  appear  that  somewhere 
about  £35,000,000  or  £40,000,000  of  French  drafts  on  for- 
eign  countries   were   created  every  year  from    those   two 
sources.     It   is,    however,    certain  that  this    quantity  has 
diminished  since  the  war,  by  the  departure  of  some  of  the 
strangers  who  used  to  live  in  France,  and  also  by  the  sale, 
in  order  to  provide  funds  for  subscription  to  the  two  new 
loans,  of  some  of  the  foreign  securities  held  in  France.    But 
M.  L<?on  Say  considers  that  the  annual  diminution,  on  both 
heads  together  does  not  exceed  £4,000,000,  and  that  at  least 
£30,000,0  1'^  of  paper,   representing  cash  due  to  France  on 
account  of  incomes  from  abroad,  irrespective  of  commoroi' 
properly  so  called,  were  drawn  in  1871  and  1872.     In  sup- 
port  of   these   considerations,    he   mentions,    among  other 
facts,  that  in  1868  and  1869  the  coupons  paid  in  Paris  o" 
Italian  stock  alone  amounted  to  £3,400,000;  while  in  1872 
and  1873  they  fell  to  £2,400,000.     On  this  one  security, 


THE  FRENCH  INDEMNITY, 


848 


therefore,  which  is,  however,  probably  held  in  France  in 
larger  proportions  than  any  other  foreign  stock,  the  diminu- 
tion of  income  since  the  war  amounts  to  £1,000,000.  With 
these  figures  and  probabilities  before  him,  he  concludes  by 
expressing  the  confident  opinion  that,  as  French  purchases 
of  foreign  stocks  have  ceased,  to  a  great  extent  at  least,  since 
1870,  and  as  remittances  of  French  money  to  pay  for  such 
purchases  have  consequently  ceased  as  well,  the  drafts  on 
other  countries  for  coupons  and  revenues  became  entirely 
disposable  for  transmission  to  Berlin,  and  that  it  is  here  that 
the  main  explanation  lies  of  the  facility  with  which  the 
bills  were  found.  This  theory  is  ingenious,  and  it  is  proba- 
bly in  great  part  true. 

The  movement  of  the  precious  metals  forms  a  separate 
element  of  the  subject,  and  one  that  is  not  easy  to  trace  out ; 
for  in  France,  as  in  most  other  countries,  the  public  returns 
of  the  international  trade  in  specie  are  very  incomplete. 
We  know  how  much  gold  and  silver  are  raised  from  mines, 
and  how  much  thereof  is  coined  by  each  country ;  but  we  are 
very  ill  informed  as  to  what  becomes  of  them  when  once  they 
have  issued  from  the  mint.  On  this  head  also,  however,  M. 
L^on  Say  has  collected  some  valuable  facts.  The  Custom- 
house Reports  inform  us  that  during  the  three  years  from 
1871  to  1873  .£53,400,000  of  bullion  were  exported,  and 
£50,480,000  were  imported;  on  this  showing,  therefore,  the 
loss  of  bullion  was  only  £2,920,000.  But  as  private  infor- 
mation gave  good  reason  to  believe  that  the  amounts  must 
have  boon  in  reality  considerably  larger,  calculations  have 
been  made  in  order  to  arrive  at  a  more  correct  conclusion. 
It  appears,  from  official  publications,  that  the  stock  of  gold 
and  silver  in  the  Christian  world  is  supposed  to  have  in- 
creased by  £371,000,000  from  1849  to  1867;  but  the  aug- 
mentation has  not  occurred  in  both  the  metals,  it  has  taken 
place  in  gold  only;  the  quantity  of  gold  is  greater  by 
=£428,000,000,  while,  in  consequence  of  cxportations  to 
Asia,  the  quantity  of  silver  has  diminished  by  £57,000,000. 
Now  out  of  this  £428,000,000  of  new  gold,  France  alone,  in 
the  first  instance,  received  more  than  half ;  at  least  we  are 


M 


844 


ECONOMIC  HISTORY. 


'■'■}. 


r- 


ll  iii 


justified  in  supposing  so,  from  the  fact  that,  during  the  same 
period  the  Paris  mint  converted  £230,000,000  of  bar  gold 
into  French  coin.  Of  course  this  quantity  of  gold  did  not  re- 
main  permanently  in  France ;  its  whole  value  was  not  added 
in  reality  to  the  general  French  stock  of  metal;  as  gold 
arrived  in  France  silver  went  away ;  indeed  it  is  imagined 
that,  out  of  the  £200,000,000  of  silver  which  have  been  coined 
in  France  since  the  year  1800  only  £40,000,000  remained 
in  the  country  in  1869.  It  is,  however,  calculated  that  the 
£100,000,000  of  hard  cash,  gold  and  silver  together,  which 
were  said  to  really  belong  to  France  in  1848,  have  doubled 
since;  and  M.  Wolowski,  who  is  regarded  as  an  authority 
on  such  questions,  declared  in  the  French  Chamber,  on  4th 
February  last  that,  in  his  opinion,  the  national  stock  now 
ranges  between  £200,000,000  and  £250,000,000. 

But  whatever  be  the  interest  of  these  computations,  and 
useful  as  it  may  be  to  count  up  the  amount  of  bullion  which 
has  come  into  France,  we  must  look  elsewhere  for  informa- 
tion as  to  the  quantity  of  it  which  the  consequences  of  the 
war  took  out.  We  know  that  the  German  mint  melted 
down,  for  its  own  coinage,  £33,880,000  of  French  napoleons. 
It  is  also  known,  says  M.  L^on  Say,  that  the  Bank  of  Eng- 
land bought  nearly  £8,000,000  of  the  same  sort  of  money 
between  1870  and  1873.  Here,  therefore,  we  can  trace  the 
passage  out  of  France,  since  the  war,  of  nearly  £42,000,000 
of  her  gold.  But,  as  Germany  drew  from  London  £1,680,000 
of  the  napoleons  which  she  put  into  the  furnace,  it  may  be 
that  that  sum  was  included  in  the  £8,000,000  of  the  Bank 
of  England,  and  is  therefore  counted  twice.  For  this  reason 
the  amount  really  sent  to  Germany  and  England  may  be  put 
at  £40,000,000. '  M.  Ldon  Say  adds,  that  the  Bank  of  Am- 
sterdam bought  a  further  £3,600,000  of  French  gold;  but, 
as  he  fancies  thai  this  may  not  have  come  direct  from 
France,  he  does  not  add  it  to  the  total,  and  he  holds  to 
£40,000,000  as  representing  probably  the  effective  loss  of 
gold  which  France  had  to  support  after  the  war.  Of  this 
sum  £10,920,000  were  exported  to  Berlin,  as  we  have  al- 
ready shown,  by  the  French  Government  itself;  the  other 


THE  FRENCH  INDEMNITY. 


345 


^£29, 080, 000  were  consequently  carried  out  by  private  firms 
for  transmission  to  Berlin,  and  for  various  other  purposes. 
Silver,  however,  arrived  in  considerable  quantities  to  replace 
the  gold.  £9,500,000  of  silver  were  coined  in  Paris  be- 
tween 1870  and  1873 ;  and  the  Custom-house  returns,  which 
arc  ahnost  always  below  the  truth,  show  an  importation  of 
£12,100,000  of  it.  From  all  this,  M.  Say  concludes  that 
£40,000,000  of  gold  left  France;  that  £12,000,000  of  silver 
came  to  her;  and  that  the  £28,000,000  of  difference  between 
the  two  represents  the  real  total  loss  of  bullion  which  the 
war  entailed. 

But  in  making  this  calculation  M.  Ldon  Say  commits  a 
most  wonderful  mistake ;  he  entirely  omits  to  take  account 
of  the  £9,/)72,000  of  silver  which  the  French  Government 
sent  to  Berlin,  and  which  must,  of  course,  be  added  to  the 
out-going.  When  this  strange  error  is  corrected,  the  loss 
becomes,  not  £28,000,000,  but  £38,000,000,  of  which  the 
Government  exported  £20,000,000,  leaving  apparently 
118,000,000  instead  of  £8,000,000,  as  the  sum  contributed 
by  private  bankers.  This  difference  of  £10,000,000  in  the 
issue  of  the  calculation  gives  some  value  to  another  com- 
putation which  M.  Ldon  Say  has  made,  but  which  would 
have  had  no  foundation  if  this  error  had  not  existed.  He 
says,  probably  with  some  truth,  that  the  quantity  of  money 
in  circulation  in  a  country  remains  usually  at  the  same 
general  total  during  the  same  period,  whatever  be  the  nature 
of  the  various  elements  which  compose  it.  He  then  goes 
on  to  arguo  that  as  the  issue  of  French  bank-notes  was 
^44,000,000  higher  in  September,  1873,  than  in  June,  1870, 
that  increase  ought  to  approximately  indicate  the  amount  of 
metal  withdrawn  in  the  interval  from  circulation,  and  re- 
placed by  notes.  But  according  to  his  theory,  that  amount 
of  naetal  did  not  exceed  £28,000,000,  leaving  an  excess  of 
^16,000,000  of  notes,  which  excess  he  explains  by  saying 
that  it  represents  an  equal  sum  in  gold  which  the  French 
people  had  hidden  away.  Now  everybody  knows  that  the 
lower  classes  of  the  French  people  do  hide  money,  do 
"thesaurise,"  as  they  say;  but  such  an  explanation  of  the 


V- 


846 


ECONOMIC  HISTORY. 


missing  JB16,000,000  is  so  purely  imaginary  that  it  cannot 
merit  any  serious  credit.  The  theory  assumes,  however,  a 
very  different  form  when  the  error  of  the  £10,000,000 
is  corrected.  In  that  case  we  have  an  extra  issue  of 
je44,000,000  in  bank-notes,  corresponding  to  a  loss  of 
£38,000,000  in  gold  and  silver;  and  there  the  two  figures 
get  sufficiently  close  to  each  other  for  it  to  be  possible  that 
there  really  is  some  relationship  between  them,  without  be- 
ing forced  to  resort  to  the  possible  but  improbable  solution 
of  thesaurising. 

Consequently,  with  all  these  various  considorations  be- 
fore us,  it  seems  reasonable  to  suppose  that  the  natures  of 
the  bills  employed  to  pay  the  war  indemnity  were  of  three 
main  classes,  and  were  grouped  approximately  in  the  follow- 
ing proportions :  — 

Drafts  for  foreign  subscriptions  to  the  loans    .  £70,920,000 

Bills  against  French  bullion  specially  exported  18,000,000 
Commercial  bills  and  drafts  for  dividends  and 

revenues  from  abroad 81,032,000 

General  total  of  bills £109,952,000 

Before  we  proceed  to  sum  up  the  case,  and  to  try  to  draw 
from  it  the  teaching  it  contains,  there  is  one  more  detail 
which  is  worth  explaining. 

We  have  alluded  to  the  coining  in  Paris  of  a  certain  quan- 
tity of  Hamburg  silver.  To  make  the  story  of  it  clear,  it  is 
necessary  to  remind  our  readers  that,  according  to  the  con- 
stitution of  the  Bank  of  Hamburg,  which  dates  from  1619, 
accounts  were  kept  by  it  in  a  money  called  marc-banco,  and 
credits  were  opened  by  it  in  that  money  on  the  deposit  of 
silver,  coined  or  uncoined,  the  value  of  that  silver  being 
calculated  pure.  By  degrees  the  marc-banco,  though  only  an 
imaginary  money,  grew  to  be  the  universal  denominator  em- 
ployed in  the  home  and  foreign  business  of  Hamburg;  it  ac- 
quired an  importance  greater  than  that  of  the  effective  money 
of  many  German  States.  But  when  the  Empire  was  estab- 
lished, and  it  was  decided  to  introduce  a  gold  standard  into 
Germany,  it  became  essential  to  suppress  the  marc-banco, 


THE  FRENCH  INDEMNITY. 


847 


for  it  had  tho  double  defect  of  representing  silver  and  of  form- 
ing a  separate  value  outside  German  monetary  unity.  So  it 
was  abolished  by  law  and  ordered  to  disappear,  —  the  plan 
adopted  being  that  the  Bank  of  Hamburg  should  liquidate 
its  deposits  by  paying  off,  in  pure  silver,  the  marcs-banco  in 
circulation.  It  was,  however,  stipulated  that  this  right 
should  cease  on  l/>th  February,  1873,  and  that  after  that 
day,  all  persons  who  held  securities  in  marcs-banco  should 
lose  the  old  right  of  receiving  pure  silver,  and  should  only  be 
entitled  to  half  a  thaler  for  each  marc-banco,  that  being  the 
value  of  the  silver  represented  by  the  latter.  Now  the 
French  Treasury  had  bought,  as  we  have  seen,  ^21,000,000 
of  bills  in  marcs-banco,  and  consequently  possessed  the  right 
of  claiming  silver  for  such  of  them  as  fell  due  before  15th 
February,  1873,  while  all  the  rest  from  that  date  were  paya- 
ble in  thalers.  The  thaler  was  "  liberative, "  while  the 
marc-banco  was  not;  but  the  pure  silver  which  the  marc- 
banco  represented  could  be  coined  into  five-franc  pieces,  and 
be  delivered  to  the  German  Government  at  the  rate  of  3 
francs  75  centimes  per  thaler.  The  result  was  that,  being 
by  far  the  largest  holder  of  marcs-banco  paper,  the  French 
Treasury  was  able  for  a  time  to  control  the  Hamburg  market, 
and  it  naturally  used  for  its  own  advantage  the  power  which 
this  position  gave  it.  The  Hamburg  Bank  was  utterly  una- 
ble to  deliver  the  quantity  of  silver  for  which  France  held 
acceptances  in  marcs-banco;  it  was  absolutely  in  the  hands 
of  the  French  Minister  of  Finance ;  that  functionary  appears, 
however,  to  have  acted  very  fairly,  — to  have  only  asked  for 
silver  in  moderavion,  and  to  have  profited  by  his  power 
solely  to  obtain  conversions  into  thalers  on  good  condi- 
tions. The  result  was,  as  we  have  said,  that  X3, 732, 000  of 
Hamburg  silver  came  to  the  Paris  mint,  partly  through  Gov- 
ernment importations  on  marcs-banco  bills,  partly  through 
private  speculators,  who  followed  the  example  of  the  Treas- 
ury, and  pressed  the  Hamburg  Bank  for  metal. 

Such  are,  in  a  condensed  form,  the  essential  features  of 
the  history  of  this  extraordinary  operation ;  end  now  that  we 
have  completed  the  account,  we  need  no  longer  delay  the 


m 


848 


ECONOMIC  HISTORY. 


Vi 


r  • 


expression  of  our  admiration  of  the  consummate  ability  with 
which  it  was  conducted.  Its  success  may  be  said  to  have 
been,  in  every  point,  complete ;  we  cannot  detect  one  sign  of 
a  grave  hitch  or  of  a  surious  error  in  it.  It  does  the  highest 
honor  to  the  officials  of  the  French  Treasury,  and  proves  that 
they  possess  a  perfect  knowledge  of  exchange  and  baiiJi- 
ing  both  in  their  minutest  details  and  in  their  largest 
applications. 

When  wo  look  back  upon  the  subject  as  a  whole,  three 
great  facts  strike  us  in  it :  the  first,  that  France  is  vastly 
rich ;  the  second,  that  the  trade  of  Europe  has  attaiiiod  such 
a  magnitude  that  figures  are  ceasing  to  convey  its  measure  ; 
the  third,  that  the  aggregate  commercial  action  of  nations  is 
a  lever  which  can  lift  any  financial  load  whatever.  As  we 
see  the  transaction  now,  with  these  explanations  uf  its  com- 
position before  us,  we  cannot  fail  to  recognize  that  it  has 
been  rather  European  than  purely  French.  All  purses 
helped  to  provide  funds  for  it;  all  trades  supplied  bills  for  it. 
In  every  previous  state  of  the  world's  commerce  such  an 
operation  would  have  been  impossible;  fifty,  thirty,  twenty 
years  a<50,  it  would  have  ruined  France  and  have  disordered 
Europe ;  in  our  time  it  has  come  and  gone  without  seriously 
disturbing  any  of  the  economic  conditions  under  which  we 
live.  France,  out  of  her  own  stores,  has  quietly  transported 
to  Berlin  a  quantity  of  bullion  larger  than  the  whole  ordi- 
nary stock  of  the  Bank  of  England ;  and  yet  she  shows  no 
sign  of  having  lost  a  sovereign.  She  has  paid  in  her  bank- 
notes for  j£  170, 000, 000  of  transmission  paper,  and  yet  the 
quantity  of  her  bank-notes  in  circulation  is  now  steadily 
diminishing.  Such  realtities  as  these  would  be  altogether 
inconceivable  if  we  did  not  see  their  cause  behind  them; 
that  cause  is  simple,  natural,  indisputable ;  its  name  is  the 
present  situation  of  the  world's  trade.  The  vastncss  of  that 
trade  explains  the  mystery. 

But  yet  with  these  advantages  to  help  it,  the  operation 
had,  in  addition  to  its  enormous  size,  certain  special  diffi- 
culties to  contend  with.  As  one  example  it  may  be  men- 
tioned that  among  the  elements    of   perturbation  and  of 


THE  FRENCH  INDEMNITY. 


849 


consequent  impediments  to  remittance,  the  French  Govern- 
ment Imd  to  keep  in  view  the  fact  that,  at  the  very  moment 
when  it  needed  all  the  monetary  facilities  it  could  obtain, 
the  Cn'rman  Government  was  locliing  up  gold  in  its  cellars, 
in  order  to  provide  metal  for  the  new  coinage  it  was  pre- 
paring. This  was  a  most  unlucky  coincidence;  but  it  ex- 
isted, and  it  had  to  bo  met.  The  Gorman  plan  was  to  hold 
hack  the  issue  of  the  new  money  until  £30,000,000  of  it 
were  ready  to  be  exchanged  for  the  old  silver  currency ;  con- 
sequently, no  silver  could  be  expected  to  leave  Germany 
until  some  months  after  the  date  at  which  the  gold  had  been 
brought  in  there ;  and  during  the  interval  France  knew  that 
she  must  suffer  from  the  withdrawal  of  so  much  bullion  from 
the  general  market.  But  she  found  assistance  in  an  unex- 
pected way ;  silver  did  flow  back  to  her  at  once  from  Ger- 
many, without  waiting  for  the  issue  of  the  new  gold  currency. 
France  paid  Germany  £9,572,000  in  French  silver;  but  this 
was  of  no  use  to  the  latter;  on  the  contrary,  it  was  an  em- 
barrassment to  her,  for  she  was  on  the  point  of  exporting  a 
quantity  of  her  own  silver,  which  would  become  superfluous 
as  soon  as  the  new  gold  got  into  circulation.  So,  for  this 
reason,  a  considerable  portion  of  the  French  five-franc  pieces 
came  back  immediately  to  France,  and  helped  to  reconstitute 
her  store. 

And  all  the  other  difficulties  were,  more  or  less,  like  this 
one.  At  first  sight  they  looked  grave  and  durable,  but  they 
diminished  or  disappeared  as  soon  as  they  were  seriously 
attacked;  the  whole  thing  turned  out  to  be  an  astonishing 
example  of  obstacles  overrated.  The  unsuspected  wealth  of 
France,  assisted  by  an  extent  of  general  commercial  dealings 
which  was  more  unsuspected  still,  managed  to  get  the  better 
of  all  the  stumbling-blocks  and  impossibilities  which  seemed 
to  bar  the  road.  France  has  lost  £400,000,000,  one  half  of 
which  she  has  delivered  to  her  enemy,  and  yet  she  is  going 
on  prospering  materially  as  if  nothing  at  all  had  happened. 
But  it  is  now  quite  clear  that  she  never  could  have  managed 
all  this  alone;  she  could  have  found  the  money,  but  never 
could  she,  single-handed,  have  carried  it  to  Germany.     It  is 


If* 


850 


ECONOMIC  niSTOUY. 


there,  far  more  than  in  subscriptionH  to  her  loans,  that  the 
world  has  really  helped  her;  she  hag  bought  back  the  stock 
that  foreigners  subscribed  for  her,  but  she  could  not  do  ho 
without  the  bills  they  sold  her.  If  she  had  been  loft  to  hor 
own  resources  for  the  transport  of  the  indemnity  to  Borlin 
she  would  probably  have  been  forced  to  send  two  thirds  of  it 
in  bullion,  and  to  empty  her  people's  pockets  for  the  pur- 
pose ;  the  vastness  of  the  world's  trade  and  the  unity  of  in- 
terests which  commerce  has  produced,  permitted  her  to  use 
other  nations'  means  of  action  instead  of  her  own. 

Viewed  in  this  light,  the  payment  of  the  five  milliards 
becomes  an  enormous  piece  of  admirably  well-arranged  in- 
ternational banking,  in  which  nearly  all  the  counting-houses 
of  Northern  Europe  took  a  share.  That  definition  of  it  is 
worth  knowing,  and  we  may  be  glad  that  the  information 
given  in  M.  Say's  report  has  enabled  us  to  arrive  at  it. 


APPLICATION  OF  THE  INDEMNITY. 


From  Kolb's  •♦  The  Condition  of  Nations  "  (Trans,  by  Mrs. 
Brewer),  pp.  206-289.^ 

When  the  North  German  Confederacy  was  formed,  not- 
withstanding the  transfer  of  the  proceeds  of  the  customs  and 
of  other  indirect  imposts  to  the  Confederacy,  and  in  spite  of 
considerable  contributions  by  the  different  States,  the  reve- 
nues did  not  suffice  to  cover  the  expenditure,  especially  that 
of  the  establishment  of  a  larger  sea  force.  A  deficit  was  the 
result,  and  loans  had  to  be  raised. 

In  the  year  1868  the  debt  of  the  Confederacy 

amounted  to £510,000 

Tu  1869  to 1,312,338 

And  in  1870  it  rose  to 1,735,743 

While  in  1871  it  was 1,088,882 

The  war  made  the  contraction  of  a  further  debt  unavoida- 
ble, both  for  the  States  of  the  North  German  Confederacy 

1  London :  George  Bell  &  Co.,  1880. 


THE  FRENCH  INDEMNITY. 


851 


ai  well  as  for  those  of  South  Germany.  The  sum  immedi- 
ately expended  on  the  war  must  have  amounted  to  about 
j£51,000,000.  The  result  of  the  war  led  to  a  complete  revo- 
lution in  the  condition  of  fmance.  Wo  extract  the  following 
data  from  the  memorandum  which  was  laid  before  the  Diet 
by  the  Imperial  Chancellor  on  February  18,  1874,  with 
reirard  to  the  application  of  the  French  war  contribution:  — 
The  Receipts  amounted  to  — 

1.  War  contribution  by  France £200,000,000 

2.  Interest  upon  this  till  the  payment  of  the 

debt 12,047,678 

Total £212,047,678 

3.  Added  to  this,  contribution  of  the  City  of 

Paris 8,025,879 

4.  Customs  levied  in  France  and  local  contri- 

butions, less  cost  of  collection,  so  far  as 
these  sums  were  not  employed  for  special 
military  purposes,  about 2,609,133 

Total  receipts £222,682,600 

Of  this  sum  £12,999,999  must  be  deducted  for  the  acqui- 
sition of  railways  belonging  to  a  private  company  in  Alsace- 
Lorraine,  the  remainder  being,  therefore,  £209,682,691. 

Expenditurei. 

Ist.  Expenses  for  which  fixed  sums  were  granted  by  Im- 
perial decrees,  namely :  — 

For  the  Imperial  Invalid  Fund £28,050,000 

For  the  completion  of  German  fortresses  .     .     .       10,800,000 

For  fortresses  in  Alsace-Lorraine 6,037,642 

For  railroads  in  the  Imperial  Dominions,  par- 
ticularly the  Wilhelm- Luxembourg  line     .     .         8,210,883 

For  Imperial  war  treasures,  to  be  kept  in  the 
Julius  tower  of  the  fortress  of  Spandau     .     .        6,000,000 

Compensation  for  the  decrease  in  the  revenue 
caused  by  alterations  in  the  management  of 
the  customs  and  taxes 2,068,907 

Imperial  Treasury  fund,  for  the  administration 
of  the  marine,  and  for  unredeemable  advances 
for  the  management  of  the  Imperial  army .    .        1,503,000 


117 'ill  i\ 

'¥'■''  'i  ■ 
i  ■ .  >  ■ 

! 

1 

852  ECONOMIC  HISTORY. 

For  gratuities  to  generals  for  distinguished  ser- 
vices    600,000 

For  aid  to  Germans  banished  from  France    .     .  300,000 

For  exercise  ground  for  the  Artillery-trial  Com- 
mission    206,250 

Expenditure  for  general  purposes  defrayed  by 
the  Imperial  Treasury  in  1870  and  1871,  and 
the  additional  outlay  for  troops  garrisoned  in 
Alsace-Lorraine  till  the  end  of  1872      .    .    .         1,249,500 


Lastly,  .£6,195,181  granted  by  an  Imperial  decree  of  July 
8,  U'73;  for  marine,  X4,206,783;  buildings  for  the  Diet, 
£1,200,000.  Supplemental  expenses  of  war,  including 
various  other  grants,  making  total  of  .£72,116,704. 

To  this  must  be  added  those  outlays  the  amount  of  which 
depends  on  the  sum  required  for  the  attainment  of  the  object 
in  view.     They  may  be  estimated  as  follows:  — 


Compensation  for  damages  by  war  and  for 
war £5,655,000 


2. 
3. 

4. 


840,000 
45,000 

1,513,466 


897,000 


Compensation  to  German  ship-owners  .     .     . 

For  war  medals 

Invalid  pensions  in  consequence  of  the  war  of 
1870,  1871,  and  1872 

Additional  for  payment  o*  invalid  pensions, 
payable  out  of  the  Imperial  Invalid  Fund 
during  the  time  that  that  fund  was  not  per- 
fectly  established 

War  expenses  connected  with  the  French  War 
costs  indemnification,  which,  according  to 
Art.  5  of  the  decree  of  July  8,  1872,  are  to 
be  treated  as  common  charges,  viz. :  — 


(a)    For  arming  and  disarming  of  fortresses  .       1,477,078 

(h)    For  siege  material 1,409,223 

(c)    For  marine  administration 1,402,876 

(</)    For  temporary  arrangements  for  coast  de- 
fence, etc 148,121 

(c)    For  laying  down  and  repairing  railroads, 

etc.,  necessary  for  prosecuting  the  war         718,797 
(/)   For  the  establishment  and  working  of 
telegraphs  outside  the  limit  of  the  tele- 
graph system 30,418 


THE  FRENCH  INDEMNITY. 


853 


(g)  For  temporary  civil  administration  in 
France,  especially  for  management  of 
railways  in  Alsace-Lorraine,  till  the 
end  of  1871 


£563,057 


(A) 
(0 
(fc) 


(0 


Further  for  services  which  from  July,  1, 
1871,  were  in  connection  with  the  war, 
viz. : — 

Management  of  the  post 

]\Iauagement  of  telegraphs 

Increased  expenditure  in  the  manage- 
ment of  the  army,  over  and  above  that 
in  time  of  peace,  consequent  upon  the 
occupation  of  French  territory   .     .     . 

Further  estimates  for  general  expenses 
to  be  defrayed  by  the  Imperial  Treas- 
ury, about      


33,750 

88,500 


3,150,000 


37,500 


The  total  amount  of  expenditure  fund  to  be  deducted  from 
the  revenue  amounts  therefore  to  £90,125,544,  leaving  a 
remainder  of  .£119,057,197  to  be  divided.  It  is,  however, 
desirable  to  retain  a  moderate  reserve  for  possible  deficien- 
cies in  the  estimated  receipts,  in  expectation  of  greater 
requirements  in  the  expenditure. 

The  sum  to  be  divided  may,  therefore,  be  ^timatcd  in 
round  numbers  at  £118,900,000.  Three  fourths  of  this 
were,  in  accordance  with  Article  6  of  the  statute  of  the  8th 
of  July,  1873,  set  apart  for  military  purposes,  in  the  propor- 
tion specified  in  the  above  Article  6,  and  one  fourth  to  be 
divided  according  to  a  fixed  standard  of  1871.  The  sura  for 
division  is  shared  as  follows:  — 

1.  Bavaria £13,380,061 

2.  Wurtemberg 4,275,130 

3.  North  German  Confederation 79,517,407 

4.  Pdden 5,019,977 

5.  Hesse 1,400,051 

I.    .,                      .  S       917,850 

tor  the  payment  of  expenses 1 16 ''Sg  5''1 

About  £22,500,000  of  the  entire  war  contribution  were, 
in  obedience  to  Imperial  decrees,  applied  to  civil  objects, 

23 


i 

1  ■■ 

1 

'■'}■' 

'  ■■ 

•'■I    '  ■:              ': 

854  ECONOMIC  HISTORY. 

the  rest  for  purposes  of  war.  The  sums  which  fell  to  the 
separate  States  in  the  division  were  also  mostly  expended 
in  defraying  the  costs  of  war,  and  the  repayment  of  loans  for 
war. 

According  to  the  statute  of  2d  of  July,  1873,  £10,027,021 
of  the  sum  to  be  divided  were  set  apart  for  restoring  the 
army  to  a  war-footing  and  increasing  its  general  cfticioncy. 

We  find  from  a  report  of  the  Commission  on  the  State  debt, 
under  date  April,  1874,  that  the  Imperial  Invalid  Fund  pos- 
sessed paper  of  nominal  value  — 

Inthalera £23,081,742 

In  South  German  guldens 9:!3,187 

In  Dutch  guldens 213,:m 

In  English  pounds  sterling 918,760 

In  dollars 3,556,800 

And  in  banks 893 

The  fortress  building  fund  possessed  at  the  same  time  a 
nominal  value  of  £5,229,795  in  effects,  and  a  capital  of 
£2,789,913  in  the  Prussian  bank.  .  .  , 


THE  LIQUIDATIONS  OF  187S-1876. 


855 


XIV. 


THE  LIQUIDATIONS  OF  1873-76. 
From  Giffen's  Essays  in  Finance,i  pp.  107-131. 

WHAT  are  the  characteristic  marks  of  the  great  depres- 
sion of  trade  during  the  last  three  or  four  years  ?  It 
is  now  ascertained  that  such  depressions  are  periodical.  They 
rocur  at  tolerably  regular  intervals,  following  in  the  wake  of 
equally  regular  periods  of  great  prosperity  in  trade,  when 
everybody  makes  profits  or  seems  to  make  them.  The  alter- 
nation has  no  doubt  its  roots  in  human  nature,  which  lends 
itself  to  an  ebb  and  flow,  an  action  and  reaction  in  affairs. 
The  depressions,  like  the  periods  of  prosperity  coming  before 
them,  have  also  many  features  in  common.  Just  as  the  pros- 
perity is  shown  by  the  prevalence  of  good  credit,  an  active 
money  market,  and  a  high  range  of  prices  for  both  securities 
and  commodities,  so  the  depression  is  marked  by  a  low  range 
of  prices,  heavy  failures,  bad  credit,  and  consequently  a  slug- 
gish money  market.  But  each  has  likewise  its  own  special 
features  and  incidents.  The  crisis  in  which  it  begins,  or 
whicli  it  produces,  indicates  some  special  development  of 
trade  at  the  time,  or  some  special  disease  in  it,  —  the  favorite 
business  of  a  country  changing  from  time  to  time,  and  a  con- 
stant tendency  existing  to  go  to  an  extreme  with  the  momen- 
tary fasliion.  We  propose,  then,  to  inquire  what  are  these 
spociiil  features  in  the  recent  depression,  —  this  proceeding 
l)eing  likely,  it  is  obvious,  to  be  more  instructive  than  a  mere 
examination  and  record  of  those  features  which  most  depres- 
sions liave  in  common.  There  is  in  additional  reason  for 
this  course.  An  impression  prevails  that  the  present  stagna- 
tion of  trade  is  unprecedented  in  intensity  and  duration,  and 

^  London :  George  Bell  and  Sons,  1880. 


if 


I 


856 


ECONOMIC  HISTORY. 


that  it  is  likely  to  be  permanent.  A  similar  impression  has 
often  been  found  to  prevail  at  such  times,  and  it  will  be  inter- 
esting to  inquire  whether  it  is  now,  for  once,  well  founded,  or 
whether  in  reality  the  depression  is  not  much  less  than  those 
to  which  trade  has  often  been  subject,  and  is  not  as  likely  as 
any  other  to  terminate  in  a  new  period  of  prosperity. 

I. 

Endeavoring  to  answer  the  question  we  have  put,  what  we 
are  first  struck  with,  in  a  general  survey  of  the  last  three  or 
four  years,  is  the  universality  of  the  depression.  Ahnost 
every  civilized  country  has  been  affected.  The  beginning  was 
in  1873,  with  the  great  Vienna  panic  and  crash  in  May  of 
that  year,  —  a  crash  which  w^as  accompanied  by  Immense 
agitation  throughout  Germany  and  in  England,  and  the  occur- 
rence of  incidents  on  almost  every  European  Bourse,  which 
only  stopped  short  of  panic.  Next  came  a  great  panic  and 
crash  in  the  autumn  of  1873  in  the  United  States,  perliajjs  the 
greatest  event  of  the  kind  to  which  that  country,  tliough  it 
has  had  many  great  panics,  has  ever  been  subject.  This  was 
accompanied  by  a  renewal  of  agitation  in  England,  as  w  ell  as 
generally  on  the  Continent,  as  the  rates  of  discount  in  Novem- 
ber, 1873,  significantly  prove.  At  that  date  the  minimum  bank 
rate  of  discouat  was  in  London  no  less  than  nine  per  cent,  the 
maximum  being  two  and  three  per  cent  higher;  the  minimum 
in  Farib  and  Brussels  was  seven  per  cent ;  in  Berlin  and  Frank- 
fort, five  per  cent;  Vienna,  five  per  cent;  and  Amsterdam, 
six  and  a  half  per  cent.  The  following  year  was  comparatively 
quiet,  but  it  was  marked  by  great  monetary  disturbances  in 
South  America,  anc  by  a  great  fall  in  prices  both  at  home,  on 
the  Continent,  and  in  the  United  States.  In  1875  came  re- 
newed disturbances  in  South  America,  a  renewal  of  agitation 
in  the  United  States  and  Germany  ;  and  then  the  Im  Tliurn, 
Aberdare,  Collie,  Sanderson,  and  other  failures,  coiistitutini' 
the  commercial  crisis  of  that  year  In  England.  This  was  in 
turn  succeeded  by  a  great  collapse  In  foreign  loans,  which  had 
been  heralded  and  jiartly  rehearsed  in  1873,  on  the  occasion 


THE  LIQUIDATIONS  OF  1873-1876. 


357 


of  the  bankruptcy  of  Spain,  and  of  which  the  conspicuous 
incident  now  was  the  non-payment  of  the  Turkish  debt  inter- 
est. To  all  these  events  succeeded  renewed  depression  and 
stagnation  in  trade  at  home,  as  well  as  on  the  Continent,  the 
crisis  in  Russia  in  1876  being  very  marked,  and  the  whole 
continuing  till  it  seemed  to  have  a  fresh  cause  in  the  appre- 
liensiou  and  actual  outbreak  of  the  present  war.  Thus  the 
depression  has  been  widespread  and  general,  —  Italy,  Spain, 
and  France  perhaps  escaping  with  little  hurt,  but  Austria, 
Germany,  Russia,  the  United  States,  and  the  South  American 
countries  having  all  been  in  deep  distress. 

This  uiiiversiility,  on  a  comparison  with  former  periods  of 
crisis,  may  be  in  fact  apparent  only,  arising  from  the  greatly 
increased  facilities  of  observation  at  the  present  day.     There 
never  was  a  time,  probably,  since  com'nercc  was  sufficiently 
f'.d.unced  in  more  countries  than  one  to  admit  of  crises,  in 
which  the  commercial  misfortunes  of  one  country  did  not  re- 
act on  countries  with  which  it  did  business.     At  such  periods 
as  1825, 1837-39, 1857-58,  1861-62,  and  1866-68,  it  is  un- 
doubtedly the  case  that  the  crisis  in  England  has  been  accom- 
panied by  more  or  less  severe  crises  elsewhere,  —  France, 
America,  England,  Holland,  and  the  German  towns  on  the 
Elbe,  having  shared  each  other's  misfortunes  more  or  less 
during  the  whole  period.     Now  the  crisis  is  felt  to  be  more 
extended,  because  we  are  immediately  informed  of  the  events 
in  most  distant  places,  because  we  see  at  once  the  association 
of  failures  at  centres  remote  from  each  other,  and  because  we 
also  see  at  once  the  effect  in  one  place  of  the  call  upon  it  to 
render  assistance  at  another  disturbed  centre  of  business.    But 
it  is  also  true  tlmt  commercial  relations  are  themselves  far 
more  extended  than  was  the  case  before  railways  and  tele- 
paphs;  that  there  are  wide  regions — in  the  United  States, 
t jr  instanee  —  which  could  not  have  beeu  the  subject  of  crisis 
twenty  or  thirty  years  ago,  because  they  were  unpeopled;  that 
such  countries  as  Austria  and  Russia  have  lately  shared  more 
largely  than  before  in  industrial  development ;  and  that  Ger- 
many has  also  advanced  farther  in  the  path  which  makes  it 
possible  for  it  to  be  tlio  subject  of  a  conmiercial  crisis.     There 


858 


ECONOMIC  HISTORY. 


is  consequently  a  real  reason  for  the  greater  extension  of  the 
commercial  depression  of  the  last  three  years  as  compared 
with  anything  before  witnessed,  while  it  is  equally  true  that 
steam  and  telegraphs,  by  facilitating  communication,  have 
destroyed  the  natural  barriers  between  the  different  coun- 
tries of  the  commercial  world.  The  London  money  market 
appears  to  be  the  great  equalizer  of  markets,  because  it  re- 
ceives the  shock  of  every  important  business  event  through- 
out the  world,  and  transmits  the  shock  of  what  it  feels  to 
every  other  centre.  But  whatever  the  nature  of  the  connec- 
tion, it  is  certain  that  there  is  a  connection  between  com- 
mercial crises  in  different  parts  of  the  world,  and  that  the 
wider  range  of  business  increases  the  possible  area  of  dis- 
aster when  once  disaster  has  set  in. 

II. 

The  next  important  characteristic  of  the  depression,  and 
perhaps  the  most  important  characteristic  of  all,  a[j])ears  to 
be  that  the  conspicuous  industry  which  has  failed  is  that  of 
the  "  exploitation  "  of  new  countries  with  littlj  surplus  capital, 
and  whose  business  is  mainly  that  of  producing  raw  materials 
and  food  for  export,  by  old  countries  which  have  large  surplus 
capital,  and  are  largely  engaged  in  manufacturing ;  in  other 
words,  the  investment  in  new  countries  by  the  capitalists  of 
old  countries.  Much  bad  business  is  brought  to  light  in  every 
depression ;  but  it  is  the  peculiarity  of  the  commercial  cycle, 
as  we  have  noticed,  that  there  is  a  change  from  time  to  time 
in  the  favorite  business,  so  that  every  period  has  ts  special 
trade  development,  and  special  trade  disease.  The  favorite 
business  for  many  years  before  1873  had  become  that  of 
foreign  investment,  and  now  the  depression  occurs  where 
there  was  the  greatest  expansion.  Direct  evidence  in  sucli 
matters  is  difficult ;  .it  would  hardly  be  possible  to  measure 
prerisely  the  extent  of  the  various  descriptions  of  disaster 
which  combine  to  make  a  crisis;  but  there  are  many  facts  and 
circumstances  which  can  leave  little  doubt  in  the  mind  that 
the  direct  evidence,  if  it  could  be  obtained,  would  wholly  con- 
firm the  conclusion  stated. 


THE  LIQUIDATIONS  OF  1873-1876. 


859 


The  order  of  events  in  the  crisis  affords  of  itself  a  very 
striking  confirmation  of  the  assumption.  The  difficulties  com- 
menced In  the  countries  more  or  less  farmed  by  the  capital 
of  England  and  other  old  countries ;  whose  industries  are 
nourished  by  public  loans  from  England,  and  by  the  invest- 
ment of  private  English  capitalists  within  their  territories, 
principally  in  the  form  of  English  iron  and  manufactures. 
Tlie  crisis  in  Austria,  which  was  the  first  in  the  whole  series, 
was  a  crisis  in  a  country  answering  this  description  to  some 
extent.  To  the  United  States,  where  the  next  crash  occurred, 
the  description  is  still  more  applicable.  The  South  American 
countries,  whose  prolonged  suffering  was  the  special  feature 
of  1874,  are  almost  a  domain  of  England ;  and  Russia,  too, 
is  largely  "  developed  "  by  English  capital.  Some  of  these 
countries,  especially  Austria  and  Russia,  have  not  been  ex- 
clusively dependent  on  English  capital.  They  have  also  bene- 
fited by  the  accumulation  of  capital  in  Holland,  Belgium,  and 
France,  which  had  been  drawn  largely  to  Germany  before 
1873,  through  the  French  indemnity,  and  had  overflowed 
thence  into  Austria  and  Russia ;  but  the  indemnity  payments. 
though  they  lielped  to  precipitate  and  aggravate  the  crisis  i.^ 
Austria,  did  not  alter  the  power  of  the  crisis  to  react  on  Eng- 
land. No  doubt,  in  1878,  as  already  noticed,  the  collapse  of 
the  foreign  loan  financing  had  been  foreshadowed;  but  the 
anticipatory  events  of  that  year  were  in  themselves  compara- 
tively unimportant,  so  that  down  to  1875  what  chiefly  hap- 
pened was  a  succession  of  monetary  and  commercial  crises  in 
countries  dependent  on  England,  but  from  which  England  by 
comparison  escaped.  In  1875  these  crises  were  succeeded  by 
a  crisis  in  England  itself  of  very  great  intensity,  naturally 
loading  to  a  renewal  of  crisis  and  distress  elsewhere,  though 
not  of  actual  panic,  and  the  whole  culminating  in  the  finan- 
cial disorders  of  the  foreign  loan  collapses,  which  will  prob- 
ably form,  in  after  years,  the  most  conspicuDus  feature  of  the 
whole  series  of  liquidations.  There  appears  to  have  been  a 
natural  order,  therefore,  in  the  successive  crises  to  which  the 
countries  dependent  on  England  have  been  subjected,  leading 
to  a  crisis  in  Englnnd  itself,  and  finally  to  a  financial  as  well 
as  a  commercial  collapse. 


1 

i 

360 


ECONOMIC  HISTORY. 


We  have  next  to  adduce  in  evidence  the  fact  of  tho  ^va^i 
expansion  of  the  business  of  investment  in  foreign  countries 
previous  to  the  depression.     The  great  multiplication  of  for- 
eign loans  in  the  period  is  now  familiar.     Not  to  speak  of 
Turkish  and  other  loans,  which  were  so  largely  mere  borrow- 
ings to  pay  interest,  there  was  a  loan  of  ^£32,000,000  for  Egypt, 
after  there  had  been  large  loans  in  1868  and  1870 ;   Cliili 
in   the  same  time  (18G7-73)  borrowed  .£5,250,000;   Pom, 
.£24,000,000;  Brazil,  £10,000,000;  Russia,  £77,000,000;  and 
Hungary,  £22,000,000,  —  exclusive  of  minor  borrowings  by 
guaranteed  companies  and  otherwise.   These  were  the  nominal 
amounts  of  the  loans,  and  the  real  money  or  mone\'s  woitli 
ever  transmitted  to  those  countries  in  respect  of  tliem  must 
have  been  much  less ;  but,  making  all  deductions,  they  indi- 
cate an  immense  direct  credit  opened  up  in  this  country  in 
favor  of  the  States  named.    The  minor  borrowings  we  liavc 
referred  to  were  equally  important,  if  not  more  imi)ortant, 
and,  especially  in  the  case  of  the  United  St.ates,  the  ogarigate 
of  small  loans  for  railways  and  other  purposes  was  ininiensc. 
All  this  direct  borrowing  likewise  implied  a  great  Investment 
of  capital  privately  in  foreign  countries.     Merchants  and 
traders  were  induced  to  set  up  establishments  abroad  to  facili- 
tate the  business  which  the  loans  brought  into  existence,  and 
accommodate  the  wants  of  emigrants  to  the  new  fields  of  in- 
dustry.    The  result  was  a  luxuriant  industrial  growth  in  the 
new  countries  by  means  of  this  vast  direct  and  indirect  credit 
which  old  countries  were  giving.    Thus  in  the  United  States, 
immediately  before  1873,  the  length  of  the  whole  railway 
system  had  been  doubled  in  seven  years ;  in  Russia  almost  the 
entire  system  of  12,000  miles  has  been  created  since  18G8;  in 
Austria  there  had  been  an  increase  from  2,200  miles  In  1865, 
to  over  6,000  miles  in  1873 ;  and  in  South  America,  Brazil, 
the  River  Plate  republics,  Chili,  and  Peru,  had  all  been  en- 
dowed with  railways  in  a  very  few  years,  —  the  loans  for 
these  countries  above  enumerated,  and  especially  the  above 
loan  of  £24,000,000  for  Peru,  being  avowedly  all  for  railways. 
And  never  was  there  a  more  rapid  development  of  the  foreign 
trade  of  the  United  Kingdom.     The  total  import  and  export 


THE  LIQUIDATIONS  OF  1873-187G. 


861 


trade,  which  was  £500,986,000  in  1867,  had  risen  in  1873,  or 
ill  six  years  only,  to  £682,292,000,  or  thirty-six  per  cent ;  and 
the  trade  per  head  from  £16  1».  Zd.  to  £21  48.  9(?.,  or  thirty- 
two  per  cent.  The  exports  of  British  produce  alone,  to  take 
the  two  extreme  years,  had  risen  from  £179,678,000  in  1868 
to  £25G,2r)7,000  in  1872,  or  forty-two  per  cent  in  four  years, 
the  increase  per  head  being  in  the  same  period  from  <£o  17«. 
4,7.  to  £8  Is.,  or  thirty-seven  per  cent.  All  this  had  followed 
a  rapid  rise  in  previous  years ;  for  the  panic  of  1866  was 
chit'dy  the  collapse  of  a  home  company  mania,  and  had  not 
brought  with  it  discredit  of  foreign  loans,  or  a  collapse  of  the 
liiisiuL'ss  of  lending  to  foreign  countries.  And  in  one  or  two 
trades  tli  increase  of  business  was  even  greater  than  the 
general  increase.  Thus  the  quantity  of  our  iron  and  steel  ex- 
ports rose  from  2,042,000  tons  in  1868  to  3,383,000  tons  in 
1872,  or  sixty-six  per  cent  in  four  years,  while  there  was  sim- 
ultaneously a  rise  of  price  which  made  the  increase  in  values 
immense,  not  only  in  these,  but  in  other  articles  where  there 
was  no  such  increase  of  quantity.  It  is  sometimes  said  that 
the  burst  of  trade  which  culminated  in  1872-73,  was  largely 
due  to  the  extra  demand  for  our  manufactures  created  by 
the  Franco-German  War.  This  war  checked  manufacturing 
on  the  Continent  for  nearly  a  twelvemonth,  besides  causing 
a  war  demand  for  certain  of  our  manufactures.  But  the 
comparison  we  have  made  is  of  a  year  when  the  war  was  long 
over,  with  a  year  quite  before  the  war,  while  the  most  con- 
spicuous instance  of  increase  in  our  exports  was  in  iron  and 
steel,  which  was  clearly  in  connection  with  increased  railway 
construction  abroad.  The  expansion  of  our  foreign  trade  was 
thus  manifestly  in  C(jnnection  with  the  general  expansion  of 
our  foreign  investment  business,  and  not  the  result  of  the 
accidental  or  temporary  causes  which  have  been  assigned. 

That  there  has  been  a  most  disproportionate  stoppage  of 
the  foreign  investment  business,  which  would  go  far  to  ac- 
count for  the  present  depression,  is  also  very  obvious.  I  do 
iiot  refer  so  much  to  the  notorious  stoppage  of  the  issues  of 
foreign  loans,  small  and  great;  after  every  great  crisis  new 
issues  uf  almost  every  kind  come  to  a  standstill,  as  frequent 


f^ 


I3i!l 


862 


ECONOMIC  HISTORY. 


experience  has  shown.  It  was  so  after  1866,  and  had  been  so 
after  similar  years  of  crisis,  although  I  doubt  if  foreign  issues, 
as  distinguished  from  home  enterprises,  have  ever  been  so  com- 
pletely stopped  as  they  are  now.  Quite  apart  from  this,  we 
have  unmistakable  evidence  of  the  decline  in  foreign  invest- 
ment business  in  the  financial  and  industrial  embarrassments 
in  new  countries,  of  which,  as  I  write,  the  great  railway  strikes 
in  the  United  States  furnish  a  new  illustration.  There  lias  also 
been  a  diminution  of  singular  magnitude  in  our  export  trade. 
That  trade  has  frequently  fallen  off  in  times  of  general  de- 
pression, but  never  to  such  an  extent  as  has  lately  been  wit- 
nessed. The  diminution  altogether  in  the  exports  of  liome 
produce  and  manufactures  has  been  from  £256,257,000  in 
1872  to  .£200,639,000  in  1876,  the  change  being  partly  due, 
as  usual,  and  perhaps  rather  more  than  usual,  to  a  fall  in 
price,  but  only  partially  to  that  cause.  There  has  not  since 
the  free  trade  period  been  such  a  decline  in  our  foreign  trade, 
just  as  there  had  been  no  previous  example  of  so  great  an 
expansion.  The  decline  has  also  been  mainly  in  tlie  exports 
to  such  countries  as  the  United  States,  which  hnd  been  our 
great  borrowers,  —  the  falling  off  to  the  United  States  alone 
being  from  ^£40,737 ,000  in  1872  to  £16,834,000  in  1876,  this 
latter  figure  being  the  lowest  since  1864.  It  has  also  been 
mainly  in  such  articles  as  iron  and  steel ;  the  exports  of  which 
diminished  from  3,383,000  tons  and  £35,996,000  in  value  in 
1872,  to  2,224,000  tons  and  £20,787,000  in  value  in  187G; 
while  the  exports  to  the  United  States  alone  fell  from  975,000 
tons  in  1872  to  only  160,000  tons  in  1876.  The  recent  dimi- 
nution in  our  export  trade  is  therefore  not  only  unusual,  but 
it  is  a  diminution  of  the  exports  to  new  countries,  and  a 
diminution  of  those  articles  which  we  send  abroad  for  the 
purpose  of  new  worlds  in  such  countries.  So  great  a  change 
in  one  great  branch  of  our  business  would  go  far  to  account 
for  the  general  depression  now  prevailing,  which  is  thus  once 
more  traced  to  the  failure  of  our  foreign  investments. 

The  embarrassments  in  the  new  countries  were  also  con- 
nected with  the  excessive  development  of  their  capabilities 
which  had  been  attempted.    A  very  considerable  amount  of 


m 

m 


THE  LIQUIDATIONS   OF  1873-1870. 


863 


the  railway  and  other  speculation  during  the  last  few  years 
haa  been  proved  to  have  been  wholly  in  anticipation  of  the 
waiita  of  the  world,  the  evidence  of  this  being  an  overpro- 
duction of  raw  materials  and  food,  the  characteristic  pro- 
ducts of  the  new  countries.  Of  this  over-production  the  most 
si;'uificant  sign  was  the  low  price  of  wheat  in  1875,  notwith- 
standing the  bad  harvest  of  that  year  in  several  countries. 
There  had  previously  been  complaint  of  low  prices  in  the 
United  States,  —  in  1873,  for  instance,  —  and  of  inability 
to  "  keep  back  "  crops.  Similar  complaints  had  also  been 
received  from  Russia  in  1874.  Even  in  1876  the  price  of 
wheat  was  slow  in  rising  in  the  autumn,  notwithstanding  a 
generally  bad  harvest,  and  the  extreme  war  rise  the  follow- 
ing spring  was  only  maintained  a  few  days.  In  other  words, 
the  assumption  as  regards  wheat  that  new  countries  might  bo 
settled  indefinitely  has  proved  to  be  erroneous.  The  result  of 
what  appears  to  be  excessive  cultivation  is  an  unremuncrative 
price,  which  leaves  merely  agricultural  communities  in  dis- 
tress, and  disturbs  their  whole  system  of  industry.  It  has 
been  the  same  with  other  raw  materials,  such  as  cotton, 
although  perhaps  not  to  the  same  extent.  But  in  general 
the  business  of  producing  raw  materials  and  food  had  been 
overdone,  and  the  crises  in  Austria  and  the  United  States  in 
1873,  followed  as  thoy  have  since  been  by  the  similar  crises 
in  South  America  and  Russia,  were  evidence  that  the  power 
to  support  the  financing  of  the  previous  two  or  three  years, 
which  was  based  on  the  business  of  investment  in  new  coun- 
tries, had  ceased. 

The  uglier  features  of  the  collapse  of  foreign  loans  also 
furnisli  evidence  of  the  characteristic  mark  of  the  crisis  with 
which  we  have  been  dealing.  In  addition  to  the  issue  of  loans, 
which  involved  the  investment  of  capital  in  a  fixed  form  to  an 
extravagant  extent,  so  that  immediate  loss  and  ruin  could  not 
but  ensue,  there  had  taken  place  in  a  few  years  before  1872 
frequent  issues  of  loans  in  foreign  countries  so-called,  which 
^ere  only  disguises  to  plunder  the  public.  We  refer  to  the 
loans  for  Honduras,  Paraguay,  San  Domingo,  and  Costa  Rica, 
which  were  investigated  by  the  Foreign  Loans  Committee, 


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IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


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Sdences 

Corporation 


23  WeST  MAIN  STMiT 

WIBSTH.N.Y.  MSIO 

(71«)  872-4503 


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Vi;  I  -■ 


S64 


ECONOMIC  HISTORY. 


and  to  a  numerous  class  of  which  these  were  perhaps  the 
most  flagrant  specimens.  These  were  simply  issues  by  knots 
of  speculators,  usually  on  the  plea  that  they  were  for  some 
public  work,  —  to  which  a  small  portion  of  the  money  raised 
was  perhaps,  in  fact,  devoted,  —  but  really  with  the  design,  as 
carried  out  by  those  concerned,  to  pay  themselves  large  sums 
in  commissions  and  otherwise,  so  long  as  the  public  could  be 
got  to  believe  in  such  things  by  the  payment  of  interest  out 
of  the  funds  they  had  themselves  advanced.  All  this  was 
very  natural.  The  peculiarity  of  the  time  being  the  develop- 
ment of  foreign  countries  by  loans,  it  was  only  natural  that 
the  illegitimate  financing  of  the  time  should  also  consist  of  so- 
called  loans.  As  there  had  been  bogus  companies  in  the  days 
of  the  company  mania,  so  now  there  were  bogus  loans. 

These  are  all  circumstances  tending  to  show  how  much  the 
bad  business  brought  to  light  in  the  recent  depression  was 
connected  with  the  business  of  investment  in  new  countries, 
and  its  accessories,  which  had  previously  just  received  so 
great  an  expansion.  As  we  have  already  remarked,  there 
was  much  bad  business  besides.  In  the  set  of  failures  con- 
nected with  that  of  Messrs.  Collie,  what  seemed  to  be  shown 
especially  was  a  peculiar  disorder  in  the  trade  with  India,— 
the  result,  it  is  probable,  of  the  undue  investment  of  capital 
in  that  trade  at  a  date  as  far  back  as  the  cotton  mania  in 
1863  and  1864.  But  the  bad  business  of  foreign  investment 
and  financing  has  certainly  been  far  the  most  prominent. 

III. 

A  third  distinguishing  mark  of  the  crisis  appears  to  be  the 
singular  lightness  of  its  effects  on  English  industry  and 
wages.  As  has  been  hinted  already,  such  is  not  the  com- 
mon impression  regarding  it.  On  the  contrary,  the  depres- 
sion of  trade  is  spoken  of  in  common  speech  as  somethinir 
entirely  unprecedented  both  in  intensity  and  duration.  But 
a  careful  examination  must  prove  that,  as  far  as  matters 
have  yet  gone,  the  common  impression  is  wrong,  and  the 
facts  are  entirely  the  other  way. 


i 


lA 


THE  LIQUIDATIONS  OF  1873-1876. 


866 


The  common  impression  appears  to  be  due  to  a  misinter- 
pretation of  two  undoubted  facts ;  first,  the  evident  magni- 
tude of  the  financial  collapse  in  foreign  loans,  which  has 
been  productive  of  great  social  distress  among  the  classes 
who  have  most  ample  opportunities  of  proclaiming  their 
grievances;  and  next,  the  magnitude  of  the  decline  of  the 
foreign  trade  of  the  country,  which  is  identified  with  a  de- 
cline in  its  whole  trade.  But  it  is  easy  to  see  that  there  is 
a  misinterpretation.  The  magnitude  of  the  financial  collapse 
is,  of  course,  very  serious.  The  novelty  of  the  deception  of 
the  public  by  bogus  loans  has  increased  the  evil  as  compared 
with  the  evil  of  a  company  mania,  while  the  opportunities  of 
fraud  were  really  more  favorable  to  the  conspirators  than  in 
the  manufacture  of  bubble  companies.  A  State  loan  sounds 
more  respectable  than  a  company  issue.  On  the  whole,  the 
securities  of  States  for  a  long  period  had  also  answered 
better  than  the  shares  of  companies,  and  although  also  in 
former  years  many  State  loans  had  proved  the  source  of  loss 
to  English  investors,  —  several  South  American  States, 
Greece,  Spain,  and  one  or  two  States  of  the  American  Union 
having  all  proved  defaulters, — yet  there  had  been  no  flagrant 
instances  of  loans  which  were  merely  cloaks  to  let  promoters 
and  financiers  have  commissions.  The  agents  and  institu- 
tions connected  with  States  also  controlled  larger  resources 
than  had  been  controlled  by  the  financiers  of  companies. 
The  inability  of  investors,  therefore,  to  form  a  good  judg- 
ment on  the  investments  submitted  to  them,  their  disposition 
to  rely  on  market  price,  and  other  extraneous  or  irrelevant 
circumstances,  was  never  experimented  on  so  widely,  or 
with  more  unfortunate  results.  Hence  the  magnitude  of  the 
l>«d  business  and  the  ensuing  collapse.  In  the  loans  for 
Turkey,  Egypt,  and  Peru  alone,  the  depreciation  of  securities 
within  a  year  after  the  Turkish  collapse  amounted  to  about 
.£150,000,000,  while  there  is  a  total  destruction  or  suspen- 
sion of  income  from  tainted  securities  exceeding  j£ 20, 000, 000 
^  year.  But  great  as  this  collapse  is,  it  has  probably  affected 
very  little  the  accumulation  or  real  wealth  of  the  country. 
Many  people  feel  themselves  poorer  than  they  were  before,  but 


■IB 


866 


ECONOMIC  HISTORY. 


the  community  as  a  whole  is  not  really  poorer  by  the  pricking 
of  all  these  bladders.  A  certain  number  of  people  are  simply 
prevented  from  continuing  any  longer  the  process  of  living 
on  their  capital,  for  that  is  what  they  were  doing  when  thev 
were  spending  the  so-called  interest  paid  them,  which  was 
really  only  a  return  of  what  they  had  themselves  advanced. 
But  the  whole  of  the  so-called  interest  was  not  so  spent,  a 
great  deal  of  it,  as  is  the  case  with  the  interest  of  every  de- 
scription of  investment,  being  reinvested,  and  in  this  way 
the  collapse  really  changes  nothing,  except  to  let  many  peo- 
ple know  that  their  accumulations  were  imaginary.  The 
direct  economic  effect  is  consequently  nil,  although  the  so- 
cial effects  and  individual  disasters  are  of  the  most  serious 
kind.  The  depression  of  trade  attending  a  financial  col- 
lapse ought  not,  therefore,  to  be  measured  by  the  seeming 
magnitude  of  the  financial  collapse  itself,  which  last  may  k 
very  great  without  the  ordinary  industry  of  a  country  being 
seriously  checked. 

As  regards  the  second  fact  which  is  misinterpreted,— 
namely,  the  decline  of  the  foreign  trade,  —  the  common  im- 
pression only  requires  to  be  challenged  to  prove  its  unsound- 
ness.    We  have  probably  a  larger  proportion  of  foreign  trade 
than  any  other  great  nation.     Our  workmen  and  cajiitalists 
have  gradually  come  to  exchange  a  larger  proportion  of  the 
products  of  their  industry  for  foreign  products  than  any  other 
people.     But  even  yet  we  are  very  far  from  exchanging  more 
than  a  small  part  of  what  we  produce.    Our  whole  agriculture 
is  for  home  consumption ;  our  coal  and  iron  mining,  our  cot- 
ton and  wool  spinning  and  weaving,  our  manufactures  gener- 
ally are  also  mainly  for  home  consumers.      A  decline  in  our 
foreign  trade,  therefore,  is  only  a  decline  in  a  branch  of  our 
whole  trade,  and  should  by  no  means  be  identified  with  a  gen- 
eral depression  in  business.    The  recent  decline  in  the  foreign 
trade,  moreover,  is  almost  entirely  a  decline  in  "optional 
business.     It  is  a  decline  in  our  exports  of  such  articles  as 
we  have  been  in  the  habit  of  exporting  as  a  means  of  invest- 
ing our  capital  abroad.     When  we  stop  such  exports,  certaiu 
branches  of  home  industry,  which  have  been  fitted  to  this 


THE  LIQUIDATIONS  OF  1978-1876. 


867 


peculiar  trade  suffer ;  but  the  capital  which  would  otherwise 
have  been  sent  abroad,  and  the  means  of  producing  that 
capital,  are  not  destroyed.  In  the  course  of  time  if  the  taste 
for  foreign  investment  does  not  revive,  the  capital  and  labor 
employed  in  making  articles  for  export  will  be  turned  to  the 
production  of  articles  for  consumption  and  investment  at 
home.  Instead  of  merely  looking  at  the  foreign  trade,  then, 
we  should  look  at  our  aggregate  trade  in  such  times  of  de- 
pression, and  not  suffer  our  opinions  to  be  distorted  by  one 
or  two  conspicuous  facts. 

Coming  to  the  subject  in  this  way,  we  do  not  see  how  it 
can  be  doubted  that  the  recent  depression,  although  it  is 
very  protracted,  is  as  yet  singularly  light  in  degree.  Our 
imports  of  the  chief  articles  of  popular  consumption,  to  begin 
with,  have  not  diminished  but  increased.  Indeed,  one  of  the 
favorite  complaints  about  the  depression  of  trade  is  the  old 
cry  of  the  excess  of  imports  over  exports,  which  is  certainly 
greater  than  usual  because  our  investments  in  new  countries 
have  ceased  for  a  time,  but  which  is  the  permanent  charac- 
teristic of  English  trade.  It  is  quite  certain,  however,  that 
no  country  scuds  us  any  goods  on  credit ;  it  is  England  which 
always  gives  credit  in  the  trade  of  the  world.  Whatever 
increase  of  imports  there  may  be,  then,  is  a  sign  of  real  abil- 
ity to  pay  for  them,  and  pro  tanto  of  the  undiminished  pros- 
perity of  the  country.  To  the  same  effect  we  have  the  fact 
of  an  increase  of  railway  traffic  year  after  year  during  the 
depression.  The  increase  in  1874  and  1876,  and  again  in 
1877  has  been  small ;  but  in  1875,  the  very  year  of  the  great 
commercial  and  financial  collapse,  it  was  considerable.  Evi- 
dence iu  the  same  sense  is  also  supplied  by  the  non-increase 
of  pauperism  all  through  the  depression,  and  by  the  steady 
augmentation  of  the  national  revenue  until  the  present  year, 
and  by  the  increase  of  the  savings-bank  deposits.  The  non- 
increase  of  pauperism  is  no  doubt  partly  duo  to  our  improved 
administration,  but  no  improvement  of  administration  could 
liave  prevented  such  an  increase  of  paupers  and  decline  of 
revenue  as  followed  the  panics  of  1847,  1857,  and  1866,  not 
to  speak  of  the  awful  convulsions  and  distress  which  marked 


868 


ECONOMIC  HISTORY. 


{ 


the  depression  of  trade  in  still  earlier  periods.  To  anv  one 
who  has  even  glanced  at  the  economic  history  of  England 
during  the  present  century,  the  common  talk  now  about  the 
"  unusual  "  depression  of  our  trade  appears  simply  ludicrous. 
The  people  who  indulge  in  it  have  sim)>ly  never  thought  of 
what  depression  of  trade  is.  There  has  probably  never  been 
a  great  commercial  crisis  in  England  which  caused  m  littlo 
Buffering  to  the  mass  of  the  nation. 

When  we  think  of  the  matter  a  little  it  seems  reasonable 
enough  also  that  the  depression  should  be  a  mild  one. 
Severe  as  the  crisis  has  been,  we  were  lucky  enough  to  t.s- 
cape  an  actual  panic,   with  the  shock  to  credit  and  other 
lamentable  incidents  which  a  panic  invariably  produces.    It 
is  probable  also  that  we  were  really  befriended  by  the  pecu- 
liar events  in  the  money  market  in  connection  with  the 
German  coinage.     The  withdrawals  of  gold  for  Cicrniany 
had  the  effect  of  anticipating  the  stringency  in  the  money 
market  w^hich  a  period  of  great  expansion  cuds  in.    The  ex- 
pansion was  thus  hindered  from  reaching  the  extreme  it 
would   otherwise   have   reached,   and   the  reaction  is  less 
severe.     Some  good  judges  are  of  opinion  that  we  have  to 
thank  yet  another  cause,  —  the  high  normal  wages  of  our 
workmen  and  their  independence  of  abundant  harvests  and 
cheap  wheat,  as  compared  with  what  was  formerly  the  case, 
80  that  all  pur  staple  industries  are  steadier  than  they  were. 
But  I  should  doubt  the  effect  of  this  cause  without  greater 
experience  than  we  have  yet  had.     Workmen  will  suffer,  it 
is  to  be  feared,  in  a  way  in  which  they  have  not  lately  suf- 
fered, if  another  time  of  expansion  such  as  there  was  in  1872 
should  reach  its  full  term  and  industry  be  subjected  to  the 
strain  of  the  inevitable  reaction.     But  without  this  cause,  the 
actual  facts  of  tl.e  absence  of  a  panic  during  all  this  dc|)re8- 
sion,  and  of  the  successive  stringencies  in  the  money  market 
which  checked  the  exuberant  growth  of  1872  and  1873,  ap- 
pear quite  sufficient  to  account  for  the  comparative  mildness 
of  the  effects  of  the  depression  we  are  witnessing. 


i 


t 


THE  LIQUIDATIONS  OF  187S-1876. 


869 


IV. 

The  marks  of  the  present  depression  which  we  have  enu- 
merated arc  thus  its  universality,  its  origin  in  the  breaking 
down  ef  the  bad  business  of  foreign  investment,  and  its 
mildness  in  the  United  Kingdom  as  compared  with  former 
l^rluds  of  depression.  Is  there  anything  in  these  peculiari- 
ties, or  in  any  other  circumstances  of  the  depression,  to  lead 
U9  to  anticipate  that  it  will  be  unusually  protracted  or  that  its 
effects  will  be  permanent  ?  Is  the  depression,  in  other  words, 
the  beginning  of  anything  unusual  or  unprecedented  ? 

To  put  the  questions  thus  explicitly  is  perhaps  to  answer 
them.  Although  there  is  much  vague  talk  about  existing 
depression, —  which  is  really  based  on  an  assumption  that  it 
ig  something  unheard  of  and  must  be  lasting,  —  it  is  not  so 
easy  to  assert  explicitly  what  is  so  confidently  assumed.  To 
suppose  the  permanence  of  almost  any  depression  would,  in 
fact,  be  to  suppose  a  change  in  human  nature  itself.  Uni- 
versal dulness  and  poverty  are,  in  fact,  contradictions  in 
terms,  unless  it  is  supposed  that  all  people  will  voluntarily 
be  idle  when  they  have  the  strongest  motives  to  work. 
Whatever  awkwardness  there  may  be  in  the  distribution  of 
labor  and  capital  at  certain  times,  the  power  to  produce  and 
the  wish  to  consume  ensure  that  with  the  means  of  production 
unimpaired, — and  there  is  no  allegation  that  the  means  of 
production  in  the  present  case  are  impaired,  —  production 
will  go  on  and  increase  with  the  increase  of  population  and 
with  every  species  of  chemical  and  mechanical  improvement. 
It  is  thus  morally  certain  that  if  at  any  time  the  industrial 
machine,  as  a  whole,  is  partially  disused  and  times  are  dull, 
a  period  of  full  employment  and  prosperity  will  return. 

And  short  of  the  depression  being  permanent,  its  effects 
will  not,  we  think,  be  worse  than  usual,  if  indeed  the  worst 
18  not  already  past.  The  disorder  has  been  very  general 
throughout  the  world,  because  industrially  the  world  is  get- 
ting to  be  more  and  more  one  country ;  but  there  is  mani- 
festly nothing  in  the  extent  of  a  depression  to  alter  its 
character  or  the  power  of  the  communities  affected  to  re- 

24 


1 

9|  s'lUB'B' 

wmmi 

1 

.mi  iBiW' '    " 

■ 

'■»    :T^if, 

i^B 

S  ';;> 

E^B 

a  iL  r>    - 

870 


ECONOMIC  HISTORY. 


r  > 


i;^ 


■.  ,..fe--..-,. 

.,  >■  ■  ■  ■  ^.  ■  : ' 


cover.  So  far  as  England  is  concerned,  moreover,  all  that 
has  happened  is  that  a  particular  part  of  our  trade,  —our 
exports  of  domestic  produce  and  manufactures,  —  is  mo- 
mentarily weak,  just  as  in  former  times  the  home  trade 
dependent  on  railway  contractors  or  bubble  companies  was 
weak.  Our  new  investments  in  a  particular  direction  have 
failed,  but  that  is  all.  There  is  clearly  no  reason  in  this  for 
any  prolonged  stoppage  or  diminished  use  of  the  industrial 
machine  for  all  the  miscellaneous  purposes  of  life,  although 
it  will  only  be  by  degrees  that  new  outlets  for  our  surplus 
capital  can  be  found.  All  the  reasons  assigned  to  account 
for  the  lightness  of  the  depression  until  now,  —  the  absence 
of  panic,  the  fact  that  the  collapse  is  so  much  a  merely  finan- 
cial one,  and  the  circumstance  that  the  expansion  previous 
to  the  depression  was  arrested  in  its  natural  development,— 
are  also  reasons  why  it  should  not  be  more  protracted  than 
usual.  Some  new  mischief  may  of  course  arise,  but  there  is 
nothing  on  the  face  of  the  facts,  according  to  all  former  ex- 
perience, to  lead  us  to  expect  an  aggravation  of  the  present 
evils. 

Nor  do  the  special  causes  sometimes  assigned  for  expect- 
ing an  unusual  degree  and  continuance  of  depression  appear 
to  be  entitled  to  much  weight.  The  British  workman,  it  is 
said,  drives  business  away  by  his  misconduct  and  his  de- 
mands for  excessive  wages.  Foreign  nations  are  increasing 
their  manufactures  of  the  very  articles  of  which  England  till 
lately  had  a  monopoly.  Every  import  of  a  foreign  manu- 
facture into  England,  at  a  time  like  this,  gives  occasion 
for  a  new  exclamation  that  English  industry  is  threatened. 
The  changes  are  constantly  rung  upon  such  facts  as  the  in- 
creased capacity  of  the  United  States  for  the  production  and 
manufacture  of  iron ;  the  importation  of  certain  descriptions 
of  American  cotton  manufactures  into  England ;  the  appear- 
ance of  Belgian  and  German  manufactures  in  our  markets  at 
a  cheaper  price  than  the  articles  can  be  made  by  ourselves. 
But  those  who  use  this  language  appear  to  fail  altogether  in 
measuring  the  extent  of  the  mischief  they  point  out  A 
great  deal  of  the  apparent  competition  of  foreign  manufac* 


tt'  ?'. 


■■..re  '*  ' 

IDS    c»     <f. 


THE  LIQUIDATIONS  OF  187S-1876. 


871 


tures  is  due  to  the  search  for  a  market  which  occurs  in  every 
time  of  depression,  and  which  furnishes  no  sure  indication 
whatever  of  any  real  change  in  the  currents  of  trade.  All 
we  know  for  certain  is  that  on  the  other  side  the  complaints 
abroad  of  the  competition  of  English  manufactures  are  loud- 
est at  such  a  time,  and  that  facts  as  to  foreign  competition, 
eimilar  to  those  now  alleged,  have  been  brought  forward  in 
every  time  of  depression  for  the  last  half-century,  without 
any  serious  permanent  result  on  English  trade  being  trace- 
able. That  trade,  on  the  contrary,  as,  for  example,  after 
the  year  1889,  when  a  great  noise  was  made  about  similar 
facts,  always  makes  a  more  rapid  advance  than  ever  after  each 
depression.  No  one  can  dispute,  indeed,  that  English  work- 
men are  often  foolish  for  their  own  interest,  or  that  some 
English  trades  have  diminished,  and  others  may  yet  dimin- 
ish or  may  become  stationary,  while  foreign  trades  of  the 
same  kind  increase.  Still  the  question  here  is  of  the  general 
prosperity,  and  it  is  easy  to  recognize  the  strength  of  the 
influences  which  are  likely,  and,  we  believe,  are  certain  to 
limit  the  evils  feared,  as,  in  fact,  they  always  have  limited 
them.  Our  workmen  do,  in  fact,  succeed  in  getting  higher 
wages,  as  a  rule,  than  foreign  workmen ;  they  do  not  migrate, 
and  pauperism  does  not,  on  an  average  of  years,  increase,  — 
all  signs  that  manufacturing,  as  a  whole,  whatever  may  hap- 
pen to  particular  trades,  increases  in  England.  It  is  because 
there  is  so  much  more  profitable  manufacturing  here  than 
elsewhere  that  our  workmen  can  enforce  the  higher  wages. 
As  we  certainly  cannot  expect  that  foreign  countries  should 
manufacture  nothing  at  all,  but  must  rather  desire  their 
manufacturing  to  increase,  there  is  really  nothing  in  all  that 
is  said  of  foreign  competition  to  concern  us  in  an  inquiry  as 
to  the  permanence  of  the  present  deprestiion. 

The  fallacy  in  the  use  of  these  alleged  facts  as  to  foreign 
competition  consists,  indeed,  very  largely  in  the  forgetful- 
ness  of  other  facts  which  are  equally  material :  that  our  for- 
eign trade  itself  is  not  everything  to  us,  but  is,  after  all, 
only  a  fraction  of  our  whole  business ;  that  long  before  com- 
petition can  diminish  that  trade  materially  it  must  produce 


m\ 


' 


II 


lij 


p.  i> 


'1:1 -V 

a}.'t# 


872 


ECONOMIC  HISTORY. 


a  fall  of  wages,  while  wages  abroad  will  rise  if  foreign  trade 
increases ;  and  that  although  foreign  countries  increase  their 
manufactures,  we  are  not  necessarily  ruined, —  probably  we 
are  greatly  gainers.  To  take  what  seems  as  formidable  a 
case  of  possible  competition  with  us  as  any  that  is  threat- 
ened, namely,  the  increase  of  the  American  iron  and  coal 
industries  under  natural  conditions.  It  seems  probable 
enough  that  in  course  of  time  these  industries  will  be  very 
largely  developed  in  the  United  States.  The  people  have 
natural  aptitude  and  skill,  and  other  advantages,  and  they 
may  produce  iron  manufactures  cheaper  than  they  can  buy 
them  abroad.  In  time  they  may  export  them  to  other  coun- 
tries. But  how  is  England  necessarily  the  poorer  for  that, 
and  how  much  ?  We  may  come  to  export  a  smaller  quantity 
of  our  iron  manufactures  to  the  United  States  than  in  the 
years  before  1872 ;  but  at  most  we  shall  only  lose  the  projit 
on  so  much  i.nde,  not  the  whole  value  of  what  we  sold  to  the 
United  States,  which  was,  in  comparison  with  our  whole 
trade,  by  no  means  a  large  sum.  Nor  shall  we  even  lose  the 
whole  profit.  We  can  only  lose  the  difference  of  profit  be- 
tween what  was  derived  from  that  trade  and  the  return  on 
the  less  profitable  trade,  into  which  a  portion  of  our  capital 
and  labor  are  diverted.  Possibly,  also,  the  growth  of  the 
world  may  be  such  that  the  expansion  of  American  industry 
will  not  be  exclusive  of,  but  will  be  coincident  with  a  simi- 
lar expansion  of  our  own,  —  there  may  be  room  for  both  of 
us.  In  that  case,  there  would  be  no  reduction  of  the  profits 
on  our  own  trade  at  all,  although  America  had  become  an 
exporter  of  iron  manufactures.  Ex  hypothed  the  increase  of 
the  American  iron  trade  would  also  mean  that  America  be- 
comes richer,  and  consequently  a  better  customer  to  the 
world  generally  for  other  things,  — thus  causing  an  increase 
of  the  general  prosperity  in  which,  with  our  extended  and 
various  trade,  we  could  not  but  participate.  Worse  things 
may  thus  happen  to  us  than  a  natural  extension  of  the  Amer- 
ican iron  trade ;  and  if  it  is  extended  by  protection  only,  it 
can  of  course  do  us  still  less  harm.  There  is  something 
essentially  unsound,  therefore,  in  the  continual  references  to 


M  i. 


THE  LIQUIDATIONS  OF  18r.'S-lS76. 


878 


the  increase  of  manufacturing  abroad.  Our  concern  should 
rather  be  to  have  that  manufacturing  increase.  To  antici- 
pate that  the  world  outside  England  is  to  be  merely  agricul- 
tural or  mining,  is  to  anticipate  the  maintenance  throughout 
the  world  of  the  least  productive  forms  of  applying  human 
industry,  and  of  low  purchasing  power  among  other  coun- 
tries. What  mankind  require  for  the  greater  efficiency  of 
their  labor  is  that  the  proportion  of  people  employed  in 
agriculture  and  mining  should  diminish,  and  more  and  more 
attention  should  be  given  to  other  forms  of  industry.  How 
England  should  grow  poorer  as  this  transformation  is  being 
effected,  it  is  difficult  to  imagine.  It  appears  to  be  as  clear 
88  any  proposition,  that  the  general  increase  of  production, 
leading  to  still  greater  varieties  and  subdivisions  of  manu- 
facturing than  those  which  now  obtain,  must  benefit  most  of 
all  the  countries  like  England,  which  have  got  the  start  of 
others,  and  possess  all  the  best  manufacturing  appliances. 

We  should  fully  expect,  then,  when  the  liquidations  which 
have  been  in  progress  are  over,  to  see  once  more  a  great 
revival  of  prosperity.  Still  more,  according  to  all  former 
ex|)er'ence,  the  prosperity  to  come  must  be  even  greater  than 
anything  yet  seen.  Ever  since  1844  there  has  been  an 
ascending  scale  in  the  rate  of  our  industrial  advance.  The 
years  after  1848-49  were  more  prosperous  than  any  before, 
but  the  prosperity  of  1863-65  exceeded  that  of  1850-53,  just 
as  the  prosperity  of  1870-73  exceeded  that  of  1863-65.  In 
like  manner  the  next  period  of  prosperity  will  probably  ex- 
hibit a  fuller  development  than  1870-73,  and  for  a  similar 
reason,  namely,  that  the  productive  capacity  of  civilized 
nations,  in  proportion  to  their  numbers,  is  annually  increas- 
ing, —  being  capable  of  almost  indefinite  increase.  More 
railways  and  more  machinery,  the  improved  knowledge  of 
chemical  and  other  arts,  imply  that,  one  year  with  another, 
in  proportion  to  their  population,  civilized  communities  can 
produce  more  real  wealth  than  they  did  before.  Depression 
comes  at  times  because  mistakes  have  been  made,  and  the 
wrong  things  are  produced ;  but  when  the  mistakes  are  cor- 
rected, or  some  new  favorable  influence  operates,  such  as  a 


V 


n 


874 


ECONOMIC  HISTORY. 


i    > 


good  harvest,  the  tide  flows  agcin,  industrial  communities 
worlc  up  to  their  full  power,  and  they  are  all  richer  than  l)c- 
fore.  Possibly  the  workmen  at  a  given  place  may  take  out 
their  share  of  the  increased  production  in  the  privilege  of 
working  fewer  hours;  but  the  prosperity  is  there,  however 
it  may  be  enjoyed.  The  great  extension  of  railways  through- 
out the  world  in  anticipation  of  real  wants,  which  was  the 
mistake  of  the  period  of  inflation,  should,  now  that  the  mis- 
take has  been  paid  for,  contribute  to  a  more  rapid  advance  of 
general  prosperity  than  would  take  place  if  the  world  had 
fewer  railways.  .  .  .  [1877.*] 

>  It  is  obvious  that  if  I  were  now  writing  I  should  hvre  to  spealc  of  tlie  liqui- 
dations, not  of  those  years  only  [187d-76],  but  of  1873-70,  and  have  to  explain 
more  points  than  I  could  possibly  talce  up  when  writing  in  1877.  But  I  lee  no 
reason  to  doubt  the  general  soundness  of  the  view  I  have  expressed  on  the  courre 
of  the  present  depression  and  its  origin ;  although,  subsequent  to  the  date  of  niy 
writing,  bad  harvests  and  other  accidents  have  aggravated  that  depreiiion 
[1870]. -R.  G. 


I' 


1; 


.j't ; 

l[    '  '.if'  I 

t  r;  III 


■mw 


INCREASE  OF  POPULATION. 


876 


XV. 


THE  UNITED  STATES  IN  1880. 

THE  INCREASE  OF  POPULATION  FRpM  1790  TO  188a 

From  Walkkr  and  Oanitett's  Rkport  on  the  Prooress  or  the 
Nation.    Tenth  Census,  Vol.  I.,  pp.  xii-xx. 


1790. 

THE  first  Census  of  the  United  States,  taken  as  of  the 
first  Monday  in  August,  1790,  under  the  provisions  of 
the  second  section  of  the  first  article  of  the  Constitution 
showed  the  population  of  the  thirteen  States  then  existing 
and  of  the  unorganized  territory  to  be,  in  the  aggregate, 
3,929,214. 

This  population  was  distributed  almost  entirely  on  the 
Atlantic  seaboard  extending  from  the  eastern  boundary  of 
Maine  nearly  to  Florida,  and  in  the  region  known  as  the 
Atlantic  plain.  Only  a  very  small  proportion  of  the  inhabi- 
tants of  the  United  States,  not,  indeed,  more  than  five  per 
cent,  was  then  to  be  found  west  of  the  system  of  the  Appala- 
chian mountains,  '^he  average  depth  of  settlement,  in  a 
direction  at  right  angles  to  the  coast,  was  255  miles.  The 
densest  settlement  was  found  in  eastern  Massachusetts, 
Rhode  Island,  and  Connecticut,  and  about  New  York  City, 
whence  population  had  extended  northward  up  the  Hudson, 
and  was  already  quite  dense  as  far  as  Albany.  The  settle- 
ments in  Pennsylvania,  which  had  started  from  Philadelphia, 
on  the  Delaware,  had  extended  northeastward  and  formed  a 
solid  body  of  occupation  from  New  York  through  Phila- 
delphia down  to  the  upper  part  of  Delaware. 

The  Atlantic  coast,  as  far  back  as  the  limits  of  tide- 
water, was  well  settled  at  that  time  from  Casco  Bay  south- 


376 


ECONOMIC  HISTORY. 


ward  to  the  northern  border  of  North  Carolina.     In  ^hat 
was  then  the  District  of  Maine,  sparse  settlements  extended 
along  the  whole  seaboard.     The  southern  two  thirds  of  New 
Hampshire  and  nearly  all  of  Vermont  were  covered  by  [(opu- 
lation.     In  New  York,  branching  off  from  the  Hudson  at  the 
mouth  of  the  Mohawk,  the  line  of  population  followed  up  a 
broad  gap  between  the  Adirondacks  and  the  Catskills,  and 
even  reached  beyond  the  centre  of  the  State,  occu[)\  inj;  the 
whole  of  the  Mohawk  valley  and  the  country  about  the  inte- 
rior New  York    lakes.      In    Pennsylvania  population  had 
spread  northwestward,  occupying  not  only  the  Atlantic  plain, 
but  with   sparse   settlements  the   region   traversed  l»y  the 
numerous  parallel  ridges  of  the  eastern  portion  of  the  Appa- 
lachians.    The  general  limit  of  settlement  was  at  that  time 
the  southeastern  edge  of  the  Allegheny  plateau,  but  beyond 
this,    at  the   junction   of  the  Allegheny  and  Mononjrahela 
rivers,  a  point  early  occupied  for  military  purposes,  eonsid- 
erable  settlements  had  been  established  prior  to  the  War  of 
the  Revolution.     In  Virginia  settlements  had  extended  west- 
ward beyond  the  Blue  Ridge,  and  into  what  is  now  West 
Virginia,  on  the  western  slope  of  the  Allegheny  mountains, 
though  very  sparsely.     From  Virginia  also  a  narrow  tonjnie 
of  settlement  had  penetrated  down  to  the  head  of  the  Ten- 
nessee  River,  in  the  great  Appalachian  valley.     In  North 
Carolina  the  settlements  were  abruptly  limited  by  the  base  of 
the  Appalachians.     The  State  was  occupied  with  remarkable 
uniformity,  except  in  its  southern  and  central  portion,  where 
population  was  comparatively  sparse.     In  South  Carolina,  on 
the  other  hand,  there  was  evidence  of  much  natural  seleetion 
apparently  with  reference  to  the  character  of  soils.     Charles- 
ton was  then  a  city  of  considerable  magnitude,  and  about  it 
was  grouped  a  comparatively  dense  population ;  but  all  along 
a  belt  running  southwestward  across  the  State  near  its  cen- 
tral part  the  settlement  was  very  sparse.    This  area  of  sparee 
settlement  joined  with  that  of  central  North  Carolina,  and 
ran  eastward  to  the  coast  near  the  junction  of  the  two  States. 
Further  westward  in  the  "up  country"  of  South  Carolina, 
the  density  of  settlement  was  noticeably  due  to  the  improve- 


IXCREASE  OF  POPULATION. 


877 


mcnt  in  soil.  At  this  date  settlements  were  almost  entirely 
agricultural,  an«l  the  causes  for  variation  in  their  density 
were  general  ones.  The  movements  of  population  at  this 
epocli  may  be  traced  in  almost  every  case  to  the  character  of 
the  soil,  and  to  facility  of  transportation  to  the  seaboard; 
and  as  the  inhabitants  were  then  dependent  mainly  upon 
water  transportation,  we  find  the  settlements  also  conform- 
in<r  themselves  very  largely  to  the  navigable  streams. 

Outside  the  area  of  continuous  settlement,  which  we  have 
iitteinpted  to  sketch,  were  found  in  1790  a  number  of  smaller 
settlements  of  greater  or  less  extent.  The  principal  of  these 
lay  in  northei'n  Kentucky,  bordering  upon  the  Ohio  River, 
cuinprising  an  area  of  10,900  square  miles.  Another  in 
western  Virginia  lay  upon  the  Ohio  and  Kanawha  rivers, 
and  coin[trised  750  square  miles.  A  third  in  Tennessee, 
upon  the  Cumberland  River,  embraced  1,200  square  miles. 

In  addition  to  these,  there  were  a  score  or  more  of  small 
|)08t8,  or  incipient  settlements,  scattered  over  what  was  then 
an  almost  untrodden  wilderness,  such  as  Detroit,  Yincennes, 
Kaskaskia,  Prairie  du  Chien,  Mackinac,  and  Green  Bay, 
besides  the  humble  beginnings  of  Elmira  and  Binghamton, 
in  New  York,  which,  even  at  that  time  lay  outside  the  body 
of  eontinuous  settlement. 

Following  the  line  which  limits  this  great  body  of  settle- 
ment in  all  its  undulations,  we  find  its  length  to  be  3,200 
miles.  In  this  measurement  no  account  has  been  made  of 
slight  Irregularities,  such  as  those  in  the  ordinary  meander- 
ingsof  a  river  which  forms  the  boundary  line  of  population; 
but  we  have  traced  all  the  ins  and  outs  of  this  frontier  line, 
whieh  seem  to  indicate  a  distinct  change  in  the  settlement  of 
tlio  CDuntry  for  any  cause,  whether  of  progression  or  of  retro- 
wssion.  The  area  of  settlement,  thus,  is  the  area  embraced 
wtweeu  the  frontier  line  and  the  coast,  diminished  by  such 
unsettled  areas  as  may  lie  within  it,  and  increased  by  such 
as  lie  without  it.  These  arc  not  susceptible  of  very  accurate 
•li'tormination,  owing  to  the  fact  that  our  best  maps  are,  to  a 
cortaia  extent,  incorrect  in  boundaries  and  areas;  but  all 
the  accuracy  required  for  our  present  purpose  can  be  secured. 


y  ^' 


378 


ECONOMIC  HISTORY. 


The  settled  area  of  1790,  as  indicated  by  the  line  traced,  is 
226,085  square  miles.  The  entire  body  of  continuously  set- 
tled area  lay  between  31"  and  45"  north  latitude  and  67' 
and  83°  west  longitude. 

Outside  of  this  body  of  continuous  settlement  are  the 
smaller  areas  mentioned  above,  which,  added  to  the  main 
body  of  settled  area,  give  as  a  total  239,935  square  miles, 
the  aggregate  population  being  3,929,214,  and  the  average 
density  of  settlement  16.4  to  the  square  mile. 

In  1790  the  District  of  Maine  belonged  to  Massachusetts. 
Georgia  comprised  not  only  the  present  State  of  that  name, 
but  nearly  all  of  what  are  now  the  States  of  Alabama  and  Mis- 
sissippi. The  States  of  Kentucky  and  Tennessee  were  then 
known  as  the  "Territory  south  of  the  Ohio  River,"  and  the 
present  States  of  Ohio,  Indiana,  Illinois,  Michigan,  Wisconsin, 
and  part  of  Minnesota,  as  the  "  Territory  northwest  of  the  Ohio 
River. "  Spain  claimed  possession  of  what  is  now  Florida, 
with  a  strip  along  the  southern  border  of  Alabama,  Missis- 
sippi, and  all  of  the  region  west  of  the  Mississippi  River. 

An  inspection  of  the  maps  relating  to  the  earlier  census 
years  will  show  that  the  progress  of  population  westward 
across  the  Appalachian  system  has  taken  place,  in  the  main, 
along  four  lines.  The  northernmost  of  these,  which  was  the 
first  to  be  developed,  runs  through  Central  New  York,  fol- 
lowing up,  generally,  the  Mohawk  River.  This  line  has, 
throughout  our  history,  been  one  of  the  principal  courses 
of  population  in  its  westward  flow.  The  second  crosses 
southern  Pennsylvania,  western  Maryland,  and  northern 
Virginia,  parallel  to  and  along  the  course  of  the  upper 
Potomac.  The  third  runs  through  Virginia,  passing  south- 
w^estward  down  the  great  Appalachian  valley,  crossing  thence 
over  into  Kentucky  and  Tennessee.  South  of  this,  the  prin- 
cipal movement  westward  has  been  around  the  end  of  the 
Appalachian  chain,  through  Georgia  and  Alabama. 

1800. 

At  the  Second  Census,  that  of  1800,  the  frontier  line,  as 
it  appears  on  the  map,  has  been  rectified,  so  that  while  it 


INCREASE  OF  POPULATION. 


879 


embraces  282, 208  square  miles,  it  describes  a  course,  when 
measured  in  the  same  manner  as  that  of  1790,  of  only  2,800 
lineal  miles.  The  advancement  of  this  line  has  taken  place 
in  every  direction,  though  in  some  parts  of  the  country  much 
more  markedly  than  in  others. 

In  Maine  and  New  Hampshire  there  is  apparent  only  a 
slight  northward  movement  of  settlement;  in  Vermont,  on 
the  other  hand,  while  the  settled  area  has  not  decidedy  in- 
creased, its  density  has  become  greater.  Massachusetts 
shows  but  little  change,  but  in  Connecticut  the  settlements 
along  the  lower  course  of  the  Connecticut  River  have  appre- 
ciably increased. 

In  New  York  settlement  has  poured  up  the  Hudson  to  the 
mouth  of  the  Mohawk,  and  thence  through  the  great  natural 
roadway  westward.  The  narrow  tongue  which  before  ex- 
tended out  beyond  the  middle  of  the  State  has  now  widened 
mitil  it  spreads  from  the  southern  border  of  the  State  to  Lake 
Ontario.  A  narrow  belt  of  settlement  even  stretches  down 
the  St.  Lawrence,  and  along  all  the  northern  border  of  the 
State,  to  Lake  Champlain,  completely  surrounding  what 
may  be  characteristically  defined  as  the  Adirondack  region. 

In  Pennsylvania  settlements  have  extended  up  the  Susque- 
hanna and  joined  the  New  York  groups,  leaving  as  yet  an 
unsettled  space  in  the  northeast  corner  of  the  State,  which 
comprises  a  body  of  rugged  mountain  country.  With  the 
exception  of  a  little  strip  along  the  western  border  of  Penn- 
sylvania, the  northern  part  of  the  State,  west  of  the  Susque- 
hanna, is  as  yet  entirely  without  inhabitants.  Population 
has  streamed  across  the  southern  half  of  the  State,  and  set- 
tled in  a  dense  1)  ^y  about  the  forks  of  the  Ohio  River,  at  the 
present  site  of  Pittsburgh,  and  thence  extended  slightly  into 
the  State  of  Ohio.  In  Virginia  we  note  but  little  change, 
although  there  is  a  general  extension  of  settlement,  with  an 
increase  in  density,  especially  along  the  coast.  North  Caro- 
lina is  now  almost  entirely  covered  with  population;  the 
mountain  region  has,  generally  speaking,  been  nearly  all 
reclaimed  to  the  service  of  man.  In  South  Carolina  there 
is  a  general  increase  in  density  of  settlement,  while  the 


".',   M>r 


f 


m 


hij'i 


880 


ECONOMIC  HISTORY. 


southwestern  border  has  been  carried  down  until  now  the 
Altamaha  River  is  its  limit.  The  incipient  settlements  in 
northern  Kentucky  have  spread  southward  across  the  State, 
and  even  into  Tennessee,  forming  a  junction  with  the  little 
settlement,  noted  at  the  date  of  the  last  census,  on  the  Cum- 
berland River.  The  group  thus  formed  has  extended  down 
the  Ohio,  nearly  to  its  junction  with  the  Tennessee  and  the 
Cumberland,  and  across  the  Ohio  River  into  the  present  Stat« 
of  Ohio,  where  we  note  the  beginning  of  Cincinnati.  Other 
infant  set^^lemcnts  appear  at  this  date.  On  the  east  side  of 
the  Mississippi  River,  in  the  present  State  of  Mississippi,  is 
a  strip  of  settlement  along  the  bluffs  below  the  Yazoo 
bottom.  Besides  the  settlement  on  the  present  site  of  St. 
Louis,  not  at  this  time  within  the  United  States,  is  an  adja- 
cent settlement  in  what  is  now  Illinois,  while  all  the  pioneer 
settlements  previously  noted  have  grown  to  a  greater  or  less 
extent. 

From  the  region  embraced  between  the  frontier  line  and 
the  Atlantic  must  be  deducted  the  Adirondack  tract,  in 
northern  New  York,  and  the  unsettled  region  in  northern 
Pennsylvania  already  referred  to;  so  that  the  actual  area  of 
settlement,  bounded  by  a  continuous  line,  is  to  be  taken  at 
271,908  square  miles.  All  this  lies  between  30°  45'  and 
45°  15'  north  latitude,  and  67°  and  88°  west  longitude. 

To  this  should  be  added  the  aggregate  extent  of  all  settle- 
ments lying  outside  of  the  frontier  line,  which  collectively 
amount  to  33, 800  square  miles,  making  a  total  area  of  settle- 
ment of  305, 708  square  miles.  As  the  aggregate  jiopulation 
is  5,308,483,  the  average  density  of  settlement  is  17.4. 

The  infant  settlements  of  this  period  have  been  much  re- 
tarded at  many  points  by  the  opposition  of  the  Indian  tribes; 
but  in  the  neighborhood  of  the  more  densely  settled  portions 
of  the  northern  part  of  the  country  these  obstacles  have  been 
of  less  magnitude  than  farther  south.  In  Georgia,  espe- 
cially, the  large  and  powerful  tribes  of  Creeks  and  Cherokees 
have  stubbornly  opposed  the  progress  of  population. 

During  the  decade  just  past  Vermont,  formed  from  a  part 
of  New  York,  has  been  admitted  to  the  Union;  also  Ken- 


i'^:i| 


'^' . 


INCREASE  OF  POPULATION: 


881 


tecky  and  Tennessee,  formed  from  the  "Territory  south  of 
the  River  Ohio;  "  Mississippi  Territory,  having  however  very 
different  boundaries  from  the  present  State  of  that  name, 
has  been  organized;  while  the  "territory  northwest  of  the 
River  Ohio  "  has  been  divided  and  Indiana  Territory  organ- 
ized from  the  western  portion. 

1810. 

At  1810  we  note  great  changes,  especially  the  extension  of 
the  sparse  settlements  of  the  interior.     The  hills  of  western 
New  York  have  become  almost  entirely  covered  with  popula- 
tion, which  has  spread  along  the  south  shore  of  Lake  Erie 
well  over  into  Ohio,  and  has  eflfected  a  junittion  with  the 
previously  existing  body  of  population  about  the  forks  of  the 
Ohio  River,  leaving  unsettled  an  included  heart-shaped  area 
in  northern  Pennsylvania,  which  comprises  the  rugged  coun- 
try of  the  Appalachian  plateau.     The  occup:.tion  of  the  Ohio 
River  has  now  become  complete,  from  its  head  to  its  mouth, 
with  the  exception  of  small  gaps  below  the  mouth  of  the 
Tennessee.     Spreading  in  every  direction  from  the  "dark 
and  bloody  ground  "  of  Kentucky,  settlement  covers  almost 
the  entire  State,  while  the  southern  border  line  has  been 
extended  to  the  Tennessee  River,  in  northern  Alabama.     In 
Georgia  settlements  are  still  held  back  by  the  Creek  and  the 
Cherokee  Indians,  although  in  1802  a  treaty  with  the  former 
tribe  relieved  the  southwestern  portion  of  the  State  of  their 
presence,  and  left  the   ground   open  for  occupancy  by  the 
whites.    In  Ohio  settlements,  starting  from  the  Ohio  River 
and  from  southwestern  Pennsylvania,  have  worked  northward 
and  westward,  until  they  cover  two  thirds  of  the  area  of  the 
State.    Michigan  and  Indiana  are  still  virgin  territory,  with 
the  exception  of  a  little  strip  about  Detroit,  in  the  former 
State,  and  a  small  area  in  the  southwestern  part  of  the  lat- 
ter.   St.   Louis,    from  a  fur-trading  post,  has  become  an 
important  centre  of  settlement,  population  having  spread 
northward  above  the  mouth  of  the  Missouri  and  southward 
along  the  Mississippi  to  the  mouth  of  the  Ohio.     At  the 
mouth  of  the  Arkansas,  in  what  is  now  the  State  of  Arkan- 


882 


ECONOMIC  HISTORY. 


m 


I 

I 

I: 

I,- 

I 

f 


saa,  is  a  similar  body  of  settlement.  The  transfer  of  the 
Territory  of  Louisiana  to  our  jurisdiction,  which  was  effected 
in  1803,  has  brought  into  the  country  a  large  body  of  popula- 
tion,  which  stretches  along  the  Mississippi  River  from  its 
mouth  nearly  up  to  the  present  northern  limit  of  the  State  of 
Louisiana,  up  the  Red  River  and  the  St.  Francis,  in  general 
occupying  the  alluvial  regions.  The  incipient  settlements 
noted  on  the  last  map  in  Mississippi  have  effected  a  junction 
with  those  of  Louisiana,  while  in  Lower  Alabama  and  Mis- 
sissippi a  similar  patch  appears  upon  the  Mobile  and  the 
Pearl  rivers. 

In  this  decade  large  additions  have  been  made  to  the  terri- 
tory of  the  United  States,  and  many  changes  have  been 
effected  in  the  lines  of  interior  division.     The  purchase  of 
Louisiana  has  added  1,124,685  square  miles,  an  empire  in  it- 
self, to  the  United  States  and  has  given  to  us  absolute  coatrol 
of  the  Mississippi  and  its  navigable  branches.    Georgia,  dur- 
ing the  same  period,  has  ceded  to  the  United  States  the  por- 
tion of  its  territory  which  now  constitutes  the  larger  part  of 
the  States  of  Alabama  and  Mississippi.     The  State  of  Ohio 
has  been  formed  from  a  portion  of  what  previously  was  known 
as  the  "  Territory  north  of  the  Ohio  River. "    Michigan  Terri- 
tory has  been  erected,  comprising  what  is  now  the  lower  pen- 
insula of  Michigan ;  Indiana  Territory  has  been  restricted  to 
the  present  limits  of  the  State  of  that  name ;  Illinois  Terri- 
tory comprises  all  of  the  present  State  of  Illinois,  with  that  of 
Wisconsin  and  apart  of  Minnesota;  while  from  the  Louisiana 
purchase  has  been  carved  under  the  name  of  the  "  Territory 
of  Orleans  "  all  that  part  of  the  present  State  of  Louisiana 
which  lies  west  of  the  Mississippi  river,  the  remainder  of  the 
great  territory  so  cheaply  acquired  from  France  being  known 
by  the  name  of  the  "  Louisiana  Territory. " 

At  this  date  the  frontier  line  is  2,900  miles  long  and  in- 
cludes between  itself  and  the  Atlantic  408,895  square  miles. 
From  this  must  be  deducted  several  large  areas  of  unsettled 
land ;  first,  the  area  in  northern  New  York,  now  somewhat 
smaller  than  ten  years  before,  but  still  by  no  means  inconsid- 
erable in  extent;  second,  the  heart-shaped  area  in  north* 


INCREASE  OF  POPULATION. 


888 


western  Pennsylvania  embracing  part  of  the  Allegheny  pla- 
teau, in  size  about  equal  to  the  unsettled  area  in  New  York ; 
third,  a  strip  along  the  central  part  of  what  is  now  "West  Vir- 
ginia, extending  from  the  Potomac  southward,  taking  in  what 
is  now  a  part  of  eastern  Kentucky  and  southwestern  Virginia, 
and  extending  nearly  to  the  border  line  of  Tennessee ;  fourth, 
a  comparatively  small  area  in  northern  Tennessee  upon  the 
Cumberland  plateau.  These  tracts  together  comprise  26,050 
square  miles,  making  the  actual  area  of  settlement  included 
within  the  frontier  line  382,845  square  miles.  All  this  lies 
betweeii  latitude  29"  30'  and  45°  15'  north,  and  between  the 
meridians  of  67°  and  88°  30'  west. 

Beyond  the  frontier  there  are,  in  addition  to  the  steadily 
increasing  number  of  outposts  and  minor  settlements,  several 
considerable  bodies  of  population,  which  have  been  above 
noted.  The  aggregate  extent  of  these,  and  of  the  numerous 
small  patches  of  population  scattered  over  the  West  and 
South,  may  be  estimated  at  25,100  square  miles,  making  the 
total  area  of  settlement  in  1810  407,945  square  miles;  the 
aggregate  population  being  7,239,881,  and  the  average  density 
of  settlement  17.7  to  the  square  mile. 

Between  1800  and  1810  the  principal  territorial  changes 
have  been  as  follows:  Ohio  has  been  admitted,  and  the 
Territories  of  Illinois  and  Michigan  have  been  formed  from 
parts  of  Indiana  Territory. 


1820. 

The  decade  from  1810  to  1820  has  witnessed  several  terri- 
torial changes.  Florida  at  this  date  (1820)  is  a  blank  upon 
the  map.  The  treaty  with  Spain,  which  gives  her  to  us,  is 
signed,  but  the  delivery  has  not  yet  taken  place.  Alabama 
and  Mississippi,  made  from  the  Mississippi  Territory,  have 
been  organized  and  admitted  as  States.  Indiana  and  Illinois 
appear  as  States  with  their  present  limits.  The  Territory  of 
Louisiana  has  been  admitted  as  a  State.  The  District  of 
Maine  has  also  been  erected  into  a  State.  Arkansas  Terri- 
tory has  been  cut  from  the  southern  portion  of  the  Territory 
of  Louisiana.    The  Indian  Territory  has  been  constituted  to 


■t 


884 


ECONOMIC  HISTORY. 


servo  as  a  reservation  for  the  Indian  tribes.  Michigan 
Territory  has  been  extended  to  include  all  of  the  | (resent 
States  of  Michigan,  Wisconsin,  and  part  of  MinnoBota. 
That  part  of  the  old  Louisiana  Territory  remaiuinfj,  after 
cutting  out  Arkansas  and  Indian  Territory,  has  received  the 
name  of  "Missouri  Territorv." 

Again,  in  1820,  we  note  a  great  change  in  regard  to  the 
frontier  line.  It  has  become  vastly  more  involved  and  com- 
plex, extending  from  southeastern  Michigan,  on  Luke  St. 
Clair,  southwestward  into  what  is  now  Missouri;  thincc 
making  a  great  semicircle  to  the  eastward,  it  sweeps  west 
again  around  a  body  of  populatitm  in  Louisiana,  and  ends  on 
the  Gulf  coast  in  that  State.  The  area  included  by  it  has 
immensely  increased,  but  much  of  this  increase  is  bahmced 
by  the  great  extent  of  unsettled  land  included  within  it. 

Taking  up  the  changes  in  detail,  we  note,  first,  the  jrreat 
increase  in  the  population  of  central  New  York,  a  belt  of 
increased  settlement  having  swept  up  the  Mohawk  vallev  to 
Lake  Ontario,  and  along  its  shore  nearly  to  the  Niairara 
River.  A  similar  increase  is  seen  about  the  forks  of  the 
Ohio  River,  while  in  northern  Pennsylvania  the  unsettled 
region  on  the  Appnlachian  plateau  has  sensibly  dcci-eased  in 
size.  The  unsettled  area  in  western  Virginia  and  eastern 
Kentucky  has  very  greatly  diminished,  population  having 
extended  almost  entirely  over  the  Allegheny  region  in  these 
States.  The  little  settlements  about  Detroit  have  extended 
and  spread  along  the  shore  of  Lake  Erie,  until  they  have 
joined  those  in  Ohio.  The  frontier  line  in  Ohio  has  crept 
northward  and  westward,  leaving  only  the  northwestern 
corner  of  the  State  unoccupied.  Population  has  spread 
northward  from  Kentucky  and  westward  from  Ohio  into 
southern  Indiana,  covering  sparsely  the  lower  third  of  that 
State.  The  groups  of  population  around  St.  Louis,  which  at 
the  time  of  the  previous  census  were  enjoying  a  rapid 
growth,  have  extended  widely,  making  a  junction  with  the 
settlements  of  Kentucky  and  Tennessee,  along  a  broad  helt 
in  southern  Illinois ;  following  the  main  watercourses,  popu- 
lation has  gone  many  scores  of  miles  up  the  Mississippi  and 


INCREASE  OF  POPULATION. 


885 


the  Missouri  rivers.  The  settlements  in  Alabama,  which 
up  to  this  time  had  been  very  much  retarded  by  the  Creeks, 
were  rapidly  re-enforced  and  extended,  in  consequence  of  the 
victory  of  General  Jackson  over  this  tribe  and  the  subse- 
quent cession  of  portions  of  this  territory.  Immigration  to 
Alabama  has  already  become  considerable,  and  in  a  short 
time  the  whole  central  portion  of  the  State,  embracing  a 
large  part  of  the  region  drained  by  the  Mobile  River  and  its 
hranclips,  will  be  covered  by  settlements,  to  extend  north- 
ward and  effect  a  junction  with  the  Kentucky  and  Tennessee 
settlements,  and  westward  across  the  lower  part  of  Missis- 
sippi until  they  meet  the  Louisiana  settlements.  In  Georgia 
the  Cherokees  and  the  Creeks  still  hold  settlement  back 
along  the  line  of  the  Altamaha  River.  There  are,  however, 
scattered  bodies  of  population  in  various  parts  of  the  State, 
though  of  small  extent.  In  Louisiana  we  note  a  gradual 
increase  of  the  extent  of  redeemed  territory,  which  appears 
to  have  been  limited  almost  exactly  by  the  borders  of  the 
alluvial  region.  In  Arkansas  the  settlements,  which  we  saw 
at  1810  at  the  mouth  of  the  Arkansas  River,  have  extended 
up  the  bottom  lands  of  that  river  and  of  the  Mississippi,  form- 
ing a  body  of  population  of  considerable  size.  Besides  these 
a  small  body  is  found  in  the  southern  central  part  of  the 
State,  at  the  southeastern  base  of  the  hill  region,  and  another 
in  the  prairie  region  in  the  northern  part. 

The  frontier  line  now  has  a  length  of  4,100  miles,  em- 
bracing an  area,  after  taking  out  all  the  unsettled  regions 
included  between  it,  the  Atlantic,  and  the  Gulf,  of  504,517 
square  miles,  all  lying  between  2P°  30'  and  45°  30'  north 
latitude,  and  between  67°  and  93°  45'  west  longitude.  Out- 
side the  frontier  line  are  some  bodies  of  population  on  the 
Arkansas,  White,  and  "Washita  rivers,  in  Arkansas,  as  before 
noted,  as  well  as  some  small  bodies  in  the  Northwest.  Com- 
puting these  at  4,200  square  miles  in  the  aggregate,  we  have 
a  total  settled  area  of  508,717  square  miles;  the  aggregate 
population  being  9,633,822,  and  the  average  density  of  set- 
tlement 18.9  to  the  square  mile. 

25 


If  '..■ 


} 


■ji,' 


m 


886 


ECONOMIC  HISTORY. 


1830. 


In  the  decade  from  1820  to  1880  other  territorial  changes 
have  occurred.  In  the  early  part  of  the  decade  the  final 
transfer  of  Florida  from  Spanish  jurisdiction  was  elTected 
and  it  became  a  Territory  of  the  United  States.  Missouri 
has  been  carved  from  the  southeastern  part  of  the  old  Mis- 
souri Territory,  and  admitted  as  a  State.  Otherwise  the 
States  and  Territories  have  remained  nearly  as  before. 
Settlement  during  the  decade  has  again  spread  greatlj. 
The  westward  extension  of  the  frontier  does  not  appear  to 
have  been  so  great  as  in  some  former  periods,  the  energies 
of  the  people  being  mainly  given  to  filling  up  the  included 
areas.  In  other  words,  the  decade  from  1810  to  1820  seems 
to  have  been  one  rather  of  blocking  out  work  which  the  suc- 
ceeding decade  has  been  largely  occupied  in  completing. 

During  this  period  the  Indians,  especially  in  the  South, 
have  still  delayed  settlement  to  a  great  extent.  The  Creeks 
and  the  Cherokees  in  Georgia  and  Alabama,  and  the  Choc- 
taws  and  the  Chickasaws  in  Mississippi,  occupy  large  areas 
of  the  best  portions  of  those  States  and  successfully  resist 
encroachment  upon  their  territory.  Georgia,  however,  has 
witnessed  a  large  increase  in  settlement  during  the  decade. 
The  settlements  which  have  heretofore  been  "stayed  on  the  line 
of  the  Altamaha  spread  westward  across  the  central  portion 
of  the  State  to  its  western  boundary,  where  they  have  struck 
against  the  barrier  of  the  Creek  territory.  Stopped  at  this 
point,  they  have  moved  southward  down  into  the  southwest 
corner,  and  over  into  Florida,  extending  even  to  the  Gulf 
coast.  Westward  they  have  stretched  across  the  southern 
part  of  Alabama,  and  joined  that  body  of  settlement  which 
was  previously  formed  in  the  drainage-basin  of  the  Mobile 
River.  The  Louisiana  settlements  have  but  slightly  in-  . 
creased,  and  no  great  change  appears  to  have  taken  place  in  | 
Mississippi,  owing  largely  to  the  cause  above  noted,  namely, 
the  occupancy  of  the  soil  by  Indians.  In  Arkansas  the  spread 
of  settlement  has  been  in  a  strange  and  fragmentary  way. 
A  line  reaches  from  Louisiana  up  the  Arkansas  River  to  the 


INCREASE  OF  POPULATION. 


887 


State  line,  where  it  is  stopped  abruptly  by  the  boundary  of 
the  Indian  Territory.  It  extends  up  the  Mississippi,  and 
joins  the  great  body  of  population  in  Tennessee.  A  branch 
extends  northeastward  from  near  Little  Rock  to  the  northern 
portion  of  the  State.  All  these  settlements  within  Arkansas 
Territory  are  as  yet  very  sparse.  In  Missouri  the  principal 
extension  of  settlement  has  been  in  a  broad  belt  up  the  Mis- 
souri River,  reaching  to  the  present  site  of  Kansas  City,  at 
the  mouth  of  the  Kansas  River,  where  quite  a  dense  body  of 
population  appears.  Settlement  has  progressed  in  Illinois, 
from  the  Mississippi  River  eastward  and  northward,  covering 
more  than  half  the  State.  In  Indiana  it  has  followed  up  the 
Wabash  River,  and  thence  has  spread  until  it  reaches  nearly 
to  the  north  line  of  the  State.  But  little  of  Ohio  remains 
unsettled.  The  sparse  settlements  about  Detroit,  in  Michi- 
gan Territory,  have  broadened  out,  extending  into  the  inte- 
rior of  the  State,  while  isolated  patches  have  appeared  in 
various  other  localities. 

Turning  to  the  more  densely  settled  parts  of  the  country, 
we  find  that  settlement  is  slowly  making  its  way  northward 
in  Maine,  although  discouraged  by  the  poverty  of  the  soil 
and  the  severity  of  the  climate.  The  unsettled  tract  in 
northern  New  York  is  decreasing,  but  very  slowly,  as  is 
also  the  case  with  the  unsettled  area  in  northern  Pennsylva- 
nia. In  western  Virginia  the  unsettled  tracts  are  reduced 
to  almost  nothing,  while  the  vacant  region  in  eastern  Ten- 
nessee, on  the  Cumberland  plateau,  is  rapidly  diminishing. 

At  this  date,  1830,  the  frontier  line  has  a  length  of  6,300 
miles,  and  the  aggregate  area  now  embraced  between  the 
ocean,  the  Gulf,  and  the  frontier  line  is  725,406  square 
miles.  Of  this,  however,  not  less  than  97,389  square  miles 
are  comprised  within  the  included  vacant  tracts,  leaving 
only  628,017  square  miles  as  the  settled  area  within  the 
frontier  line,  all  of  which  lies  between  latitude  29«'  15'  and 
46°  15'  north,  and  between  longitude  67*  and  95*  west. 

Outside  the  body  of  continuous  settlement  are  no  longer 
found  large  groups,  but  several  small  patches  of  population 
appear  in  Ohio,  Indiana,  Illinois,  Michigan,  and  Wisconsin, 


¥1 


888 


ECONOMIC  HISTORY. 


% 


11 


aggrof^ating  4,700  Hquuro  miles,  making  a  total  ncttlol  art<n, 
in  1880,  of  032,717  gqiiarc  milos.  As  the  aggregate  popula- 
tion  i8  12,806,020,  the  average  density  of  settlement  is  20.3 
to  the  stjuare  mile. 

1840. 

During  the  decade  ending  in  1840  the  State  of  Michifran 
hns  been  created  with  its  present  limits,  the  remainder  of  tlio 
old  territory  lieing  known  hs  Wisconsin  Territory.  Iowa 
Territory  has  been  created  from  a  portion  of  Missouri  Terri- 
tory, embrncinf?  the  present  State  of  Iowa  and  the  western 
part  of  Minnesota,  and  Arkansas  has  been  admitted  to  the 
Union. 

In  1840  we  find,  by  examining  the  map  of  population  that 
the  process  of  filling  up  and  completing  the  work  Itiocktil 
out  between  1810  and  1820  has  been  carried  still  farthir. 
From  Georgia,  Alal)ama,  and  Mississippi  the  Cherokee, 
Creek,  Choctaw,  and  Chickasaw  Indians,  who,  at  the  time 
of  the  previous  census,  occupied  large  areas  in  these  Stat*  s. 
and  formed  a  very  serious  obstacle  to  settlement,  have  lieeii 
removed  to  the  Indian  Territory,  and  their  country  has  been 
op<'ned  up  to  settlement.  Within  the  two  or  three  years 
which  have  elapsed  since  the  removal  of  these  Indians  the 
lands  relinquished  by  them  have  been  entirely  taken  up, 
and  the  country  has  been  covered  with  a  comparatively  dense 
settlement.  In  northern  Illinois,  the  Sac  and  Fox  and 
Pottawatomie  tribes  having  been  removed  to  the  Indian 
Territory,  their  country  has  been  promptly  taken  up,  and 
we  find  now  settlements  carried  over  the  whole  extent  of  In- 
diana, Illinois,  and  across  Michigan  and  Wisconsin  as  far 
north  as  the  forty-third  parallel.  Population  has  crossed 
the  Mississippi  River  into  Iowa  Territory,  and  oceupios  a 
broad  belt  up  and  down  that  stream.  In  Missouri  the  settle- 
ments have  spread  northward  from  the  Missouri  River  nearly 
to  the  boundary  of  the  State,  and  southward  till  they  cover 
most  of  the  southern  portion,  and  make  connection  in  two 
places  with  the  settlements  of  Arkansas.  The  unsettled  area 
found  in  southern  Missouri,  together  with  that  in  north- 


r- 


^-  *i 


INCREASE  OF  POPULATION. 


889 


western  Arkansas,  is  duo  to  the  hilly  and  rugged  nature  of 
the  country,  and  to  the  poverty  of  the  soil,  as  compared  with 
the  rich  prairie  lands  all  around.  In  Arkansas  the  settle- 
ments remain  sparse,  and  have  spread  widely  away  from  the 
Htreanis,  covering  much  of  the  prairie  parts  of  the  State. 
There  is,  besides  the  area  in  northwestern  Arkansas  just 
montionod,  a  largo  area  in  the  northeastern  part  of  the 
State,  comprised  almost  entirely  within  the  alluvial  regions 
uf  theSt.  Francis  Fiver,  and  also  one  in  the  suuthern  portion, 
extending  over  into  northern  Louisiana  which  is  entirely  in 
the  fertile  prairie  section.  The  fourth  unsettled  region  lies 
in  the  southwest  part  of  the  State. 

In  the  older  States  wo  note  a  gradual  decrease  in  the  unset- 
tled areas,  as  in  Maine  and  in  New  York.  In  northern  Penn- 
sylvania the  unsettled  section  has  entirely  disappeared.  A 
small  portion  of  the  unsettled  patch  on  the  Cumberland 
plateau  still  remains.  In  southern  Georgia  the  Okeefenokee 
swamp  and  the  pine  barrens  adjacent  have  thus  far  repelled 
settlement,  although  population  has  increased  in  Florida, 
passing  entirely  around  this  area  to  the  south.  The  greater 
part  of  Florida,  however,  including  nearly  all  the  peninsula 
and  several  large  areas  along  the  Gulf  coast,  still  remains 
without  settlement.  This  is  doubtless  due,  in  part,  to  the 
nature  of  the  country,  being  alternately  swamp  and  hum- 
mock, and  in  part  to  the  hostility  of  the  Seminole  Indians, 
who  still  occupy  nearly  all  of  the  peninsula. 

The  frontier  lino  in  1840  has  a  length  of  3,300  miles. 
This  shrinking  in  its  length  is  due  to  its  rectification  on  the 
northwest  and  southwest,  owing  to  the  filling  out  of  the  entire 
interior.  It  encloses  an  area  of  900,658  square  miles,  all 
lying  between  latitude  29°  and  46°  30'  north,  and  longitude 
67°  and  95°  30'  west.  The  vacant  tracts  have,  as  noted 
above,  decreased,  although  they  are  still  quite  considerable 
in  Missouri  and  Arkansas.  The  total  area  of  the  vacant 
tracts  is  95,516  square  miles.  The  settled  area  outside  the 
frontier  line  is  notably  small,  and  amounts,  in  the  aggregate, 
toonly  2,150  miles,  making  the  entire  settled  area  807,292 
square  miles  in  1840.  The  aggregate  population  being 
17,069,453,  the  average  density  is  21.1  to  the  square  mile. 


r 


m'fM 


890 


ECONOMIC  HISTORY. 


1850. 


Between  1840  and  1850  the  limits  of  our  country  have 
been  further  extended  by  the  annexation  of  the  State  of 
Texas  and  of  territory  acquired  from  Mexico  by  the  treaty  of 
Guadalupe  Hidalgo.  The  States  of  Iowa,  Wisconsin,  and 
Florida  have  been  admitted  to  the  Union,  and  the  Terri- 
tories of  Minnesota,  Oregon,  and  New  Mexico  have  been 
created.  An  examination  of  the  maps  shows  that  the  fron- 
tier line  has  changed  very  little  during  this  decade.  At  the 
western  border  of  Arkansas  the  extension  of  settlement  is 
peremptorily  limited  by  the  boundary  of  the  Indian  Terri- 
tory; but  curiously  enough  also,  the  western  boundary  of 
Missouri  puts  almost  a  complete  stop  to  all  settlement,  not- 
withstanding that  some  of  the  most  densely  populated  por- 
tions of  the  State  lie  directly  on  that  boundary.  In  Iowa 
settlements  have  made  some  advance,  moving  up  the  Mis- 
souri, the  Des  Moines,  and  other  rivers.  The  settlements 
in  Minnesota  at  and  about  St.  Paul,  which  appeared  in  18J0, 
are  greatly  extended  up  and  down  the  Mississippi  River, 
while  other  scattering  bodies  of  population  appear  in  north- 
ern Wisconsin.  In  the  southern  part  of  the  State  settlement 
has  made  considerable  advance,  especially  in  a  northeastern 
direction,  towards  Green  Bay.  In  Michigan  the  change  has 
been  very  slight. 

Turning  to  the  southwest  we  find  Texas,  for  the  first  time 
on  the  map  of  the  United  States,  with  a  considerable  extent 
of  settlement ;  in  general,  however,  it  is  very  sparse,  most 
of  it  lying  in  the  eastern  part  of  the  State,  and  being  largely 
dependent  upon  the  grazing  industry. 

The  included  unsettled  areas  now  are  very  small  and  few 
in  number.  There  still  remains  one  in  southern  Missouri. 
in  the  hilly  country ;  a  small  one  in  northeastern  Arkansas,  in 
the  swampy  and  alluvial  region;  and  one  in  the  similar 
country  in  the  Yazoo  bottom-lands.  Along  the  coast  ol 
Florida  are  found  two  patches  of  considerable  size,  which  are 
confined  to  the  swampy  coast  regions.  The  same  is  the  case 
along  the  coast  of  Louisiana.     The  sparse  settlements  of 


INCREASE  OF  POPULATION. 


391 


our  country  have 
of  the  State  of 
0  by  the  treaty  of 
Wisconsin,  and 
I,  and  the  Terri- 
[exico  have  been 
ows  that  the  fron- 
s  decade.  At  the 
L  of  settlement  is 
the  Indian  Terri- 
itcrn  boundary  of 
11  settlement,  not- 
lely  populated  por- 
lundary.  In  Iowa 
)ving  up  the  Mis- 

Thc  settlements 
.  appeared  in  1840, 
Mississippi  River, 
n  appear  in  north- 
le  State  settlement 

in  a  northeastern 
ran  the  change  has 


^ery  small  and  few 
iouthern  Missouri. 
istern  Arkansas,  in 
tie  in  the  simihir 
.ong  the  coast  of 
,le  size,  which  are 
le  same  is  the  caso 
•se  settlements  of 


Texas  are  also  interspersed  with  several  patches  devoid  of 
settlement.  In  southern  Georgia  the  large  vacant  space 
heretofore  noted,  extending  also  into  northern  Florida,  has 
entirely  disappeared,  and  the  Florida  settlements  have  al- 
ready reached  southward  to  a  considerable  distance  in  the 
peninsula,  being  now  free  to  extend  without  fear  of  hostile 
Seminoles,  the  greater  part  of  whom  have  been  removed  to 
the  Indian  Territory. 

The  frontier  line,  which  now  extends  around  a  considerable 
part  of  Texas  and  issues  on  the  Gulf  coast  at  the  mouth  of  the 
N'ueecs  River, is  4,500  miles  in  length.  The  aggregate  area  in- 
cluded by  it  is  1,005,213  square  miles,  from  which  deduction 
is  to  be  made  for  vacant  spaces,  in  all,  64,339  square  miles. 
The  isolated  settlements  lying  outside  this  body  in  the  west- 
ern part  of  the  country  amount  to  4,775  square  miles. 

But  it  is  no  longer  by  a  line  drawn  around  from  the  St. 
Croix  River  to  the  Gulf  of  Mexico  that  we  embrace  all  the 
population  of  the  United  States,  excepting  only  a  few  outly- 
ing posts  and  small  settlements.  We  may  now,  from  the 
Pacific,  run  a  line  around  80,000  miners  and  adventurers, 
the  pioneers  of  more  than  one  State  of  the  Union  soon  to 
arise  on  that  coast.  This  body  of  settlement  has  been 
formed,  in  the  main,  since  the  acquisition  of  the  territory  by 
the  United  States,  and,  it  might  even  be  said,  within  the 
last  year  (1849-50),  dating  from  the  discovery  of  gold  in 
California.  These  settlements  may  be  computed  rudely  at 
33,600  square  miles,  making  a  total  area  of  settlement  at 
that  date  of  979, 249  square  miles,  the  aggregate  population 
being  23,191,876  and  the  average  density  of  settlement  23.7 
to  the  square  mile. 

1860. 

Between  1850  and  1860  the  territorial  changes  noted  are 
as  follows:  the  strip  of  Arizona  and  New  Mexico  south  of 
the  Gila  River  has  been  acquired  from  Mexico  by  the  Gads- 
'Itn  purchase  (1853) ;  Minnesota  Territory  has  been  admitted 
as  a  State;  Kansas  and  Nebraska  Territories  have  been 
formed  from  parts  of  Missouri  Territory;    California  and 


;c 


392 


ECONOMIC  HISTORY. 


fit,. 


Oregon  have  been  admitted  as  States,  while,  in  the  unsettled 
parts  of  the  Cordilleran  region,  two  new  Territories  (Utah 
and  Washington)  have  been  formed  out  of  parts  of  that  terra 
incognita  which  we  bought  from  France  as  a  part  of  Louisi- 
ana, and  of  that  which  we  acquired  by  conquest  from  Mexico. 
At  this  date  we  note  the  first  extension  of  settlements  beyond 
the  line  of  the  Missouri  River.  The  march  of  settlement  up 
the  slope  of  the  great  plains  has  begun.  In  Kansas  and  Ne- 
braska population  is  now  found  beyond  the  97th  meridian. 
Te.\as  has  filled  up  even  more  rapidly,  its  extreme  settle- 
ments reaching  to  the  100th  meridian,  while  the  gaps  noted 
at  the  date  of  the  last  census  have  all  been  filled  by  popula- 
tion. The  incipient  settlements  about  St.  Paul,  in  Minnesota, 
have  grown  like  Jonah's  gourd,  spreading  in  all  directions, 
and  forming  a  broad  band  of  union  with  the  main  body  of  set- 
tlement down  the  line  of  the  Mississippi  River.  In  Iowa  set- 
tlements have  crept  steadily  northwestward  along  the  course 
of  the  drainage,  until  the  State  is  nearly  covered.  Following 
up  the  Missouri,  population  has  reached  out  into  the  south- 
eastern corner  of  the  present  area  of  Dakota.  In  Wisconsin 
the  settlements  have  moved  at  least  one  degree  farther  north, 
while  in  the  lower  peninsula  of  Michigan  they  have  spread  up 
the  lake  shores,  nearly  encircling  it  on  the  side  next  Lake 
Michigan.  On  the  upper  peninsula  the  little  settlements 
which  appeared  in  1850  in  the  copper  region  on  Keeweenaw 
Point  have  extended  and  increased  greatly  in  density  as  that 
mining  interest  has  developed  in  value.  In  northern  New 
York  there  is  apparently  no  change  in  the  unsettled  area.  In 
northern  Maine  we  note,  for  the  first  time,  a  decided  move- 
ment towards  the  settlement  of  its  unoccupied  territory,  in 
the  extension  of  the  settlements  on  its  eastern  and  northern 
border  up  the  St.  John  River.  The  unsettled  regions  in  south- 
ern Missouri,  northeastern  Arkansas,  and  northwestern  Mis- 
sissippi have  become  sparsely  covered  by  population.  Along 
the  Gulf  coast  there  is  little  or  no  change.  There  is  to  be 
noted  a  slight  extension  of  settlement  southward  in  the  pen- 
insula of  Florida. 

The  frontier  line  now  measures  5,300  miles,  and  cm- 


1,1.3    t: 


INCREASE  OF  POPULATION. 


393 


braces  1,126,518  square  miles,  lying  between  latitude  28°  30' 
and  47°  30'  north,  and  between  longitude  67°  and  99°  30' 
west  From  this  deduction  should  be  made  on  account  of 
vacant  spaces,  amounting  to  39,139  square  miles,  found 
mainly  iu  New  York  and  along  the  Gulf  coast.  The  outly- 
ing settlements  beyond  the  100th  meridian  are  now  numer- 
ous. They  include,  among  others,  a  strip  extending  far  up 
the  Rio  Grande  in  Texas,  embracing  7,475  scjuare  miles  (a 
region  given  over  to  the  raising  of  sheep),  while  the  Pacific 
settlements,  now  comprising  one  sovereign  State,  are  nearly 
three  times  as  extensive  as  at  1850,  embracing  99,900 
square  miles.  The  total  area  of  settl'iment  in  1860  is  thus 
1,104,754  square  miles;  the  aggregate  population  is  now 
31,443,321,  and  the  average  density  of  settlement  26.3  to 
the  square  mile. 

1870. 

During  the  decade  from  1800  to  1870  a  number  of  territo- 
rial changes  have  been  effected  in  the  extreme  West.  Ari- 
zona, Colorado,  Dakota,  Idaho,  Montana,  Nevada,  and 
Wyoming  have  been  organized  as  Territories.  Kansas, 
Nebraska,  and  Nevada  have  been  admitted  as  States.  West 
Virginia  has  been  cut  off  from  the  mother  Commonwealth 
and  made  a  separate  State. 

In  1870  we  note  a  gradual  and  steady  extension  of  the  fron- 
tier line  westward  over  the  great  plains.  The  unsettled  areas 
in  Maine,  New  York,  and  Florida  have  not  greatly  dimin- 
ished, but  in  Michigan  the  extension  of  the  lumber  interests 
northward  and  inward  from  the  Lake  shore  has  reduced  con- 
siderably the  unsettled  portion.  On  the  upper  peninsi.la 
the  settlements  have  increased  somewhat,  owing  to  the  dis- 
covery of  the  rich  iron  deposits  destined  to  play  so  important 
a  part  in  the  manufacturing  industry  of  the  country. 

^'■^Mcmcnt  has  spread  westward  to  the  boundary  of  the 
State  in  southern  Minnesota,  and  up  the  Big  Sioux  River  in 
southeastern  Dakota.  Iowa  is  entirely  reclaimed,  excepting 
a  small  area  of  perhaps  a  thousand  square  miles  in  its  north- 
western corner.     Through  Kansas  and  Nebraska  the  frontier 


394 


ECONOMIC  HISTORY. 


line  has  moved  steadily  westward,  following  in  general  the 
courses  of  the  larger  streams  and  of  the  newly  constructed 
railroads.  The  frontier  in  Texas  has  changed  but  little, 
that  little  consisting  of  a  general  westward  movement.  In 
the  Cordilleran  region  settlements  have  extended  but  slowlv. 
Those  upon  the  Pacific  coast  show  little  change,  either  in 
extent  or  in  density.  In  short,  we  see  everywhere  the 
effects  of  the  war  in  the  partial  stoppage  of  the  progress  of 
development. 

The  settlements  in  the  West,  beyond  the  frontier  line  have 
arranged  themselves  mainly  in  three  belts.  The  most  east- 
ern of  these  is  located  in  central  Colorado,  New  Mexico, 
and  Wyoming,  along  the  eastern  base  of  and  amont'  the 
Eocky  mountains.  To  this  region  settlement  was  first  at- 
tracted in  1859  and  1860  by  discovery  of  mineral  deposits, 
and  has  been  retained  by  the  richness  of  the  soil  and  by 
the  abundance  of  water  for  irrigation,  which  have  promoted 
the  agricultural  industry. 

The  second  belt  of  settlement  is  that  of  Utah,  settled  in 
1847  by  the  Moi mons  fleeing  from  Illinois.  This  community 
then  differed,  and  still  differs,  radically  from  that  of  the 
Rocky  mountains,  being  essentially  agricultural,  mining 
having  been  discountenanced  from  the  first  by  the  churcii 
authorities,  as  tending  to  fill  the  "  Promised  Land "  with 
Gentile  adventurers,  and  thereby  imperil  Mormon  institu- 
tions. The  settlements  of  this  group,  as  seen  on  the  map  for 
1870,  extend  from  southern  Idaho  southward  through  cen- 
tral Utah,  and  along  the  eastern  base  of  the  Wahsatch  range 
into  northern  Arizona.  They  consist  mainly  of  scattered 
hamlets  and  small  towns,  about  which  are  grouped  the  farms 
of  the  communities. 

The  th..d  strip  is  that  in  the  Pacific  States  and  Territo- 
ries, extending  from  Washington  Territory  southward  to 
southern  California  and  eastward  to  the  system  of  "sinks," 
in  western  Nevada.  This  group  of  population  owes  its  ex- 
istence to  the  mining  industry,  the  moving  cause  in  nearly 
all  westward  migrations.  Originated  in  1849  by  a  "stam- 
pede "  the  like  of  which  the  world  had  never  before  seen,  it 


INCREASE  OF  POPULATION. 


895 


has  grown  by  successive  impulses  as  new  fields  for  rapid 
money-getting  have  been  developed.  Latterly,  however,  the 
value  of  this  region  to  the  agriculturist  has  been  recognized, 
and  the  character  of  the  occupations  of  the  people  is  under- 
going a  marked  change. 

These  three  great  Western  groups  comprise  nine  tenths  of 
the  population  west  of  the  frontier  line.  The  remainder  is 
scattered  about  in  the  valleys  and  the  mountains  of  Montana, 
Idaho,  and  Arizona,  at  military  posts,  isolated  mining 
camps,  and  on  cattle  ranches. 

The  frontier  line  in  1870  embraces  1,178,068  square 
miles,  all  between  27°  15'  and  47°  30'  north  latitude,  and 
between  67°  and  99°  45'  west  longitude.  From  this,  how- 
ever, deduction  is  to  be  made  of  37,739  square  miles,  on 
account  of  interior  spaces  containing  no  population.  To 
what  remains  we  must  add  11,810  square  miles  on  account 
of  settled  tracts  east  of  the  100th  meridian,  lying  outside  of 
the  frontier  line,  and  120,100  square  miles  on  account  of 
settlements  in  the  Cordilleran  region  and  on  the  Pacific 
coast,  making  the  total  area  of  settlement  for  1870  not  less 
than  1,272,239  square  miles,  the  aggregate  population  being 
38,558,371,  and  the  average  density  of  settlement  30.3  to 
the  square  mile. 


1880. 

In  tracing  the  history  of  the  settlement  of  our  country  we 
are  now  brought  down  to  the  latest  census,  that  of  1880. 
During  the  decade  just  passed  Colorado  has  been  added  to 
the  sisterhood  of  States.  The  first  point  that  strikes  us  in 
examining  the  map  showing  the  areas  of  settlement  at  this 
date,  as  compared  with  previous  ones,  is  the  great  extent  of 
territory  which  has  been  brought  under  occupation  during 
the  past  ten  years.  Not  only  has  settlement  spread  west- 
ward over  large  areas  in  Dakota,  Nebraska,  Kansas,  and 
Texas,  thus  moving  the  frontier  line  of  the  main  body  of 
!''ttlemont  westward  many  scores  of  miles,  but  the  isolated 
settlements  of  the  Cordilleran  region  and  of  the  Pacific  coast 
enormous  accessions  of  occupied  territory. 


I  •;  > 


896 


ECONOMIC  HISTORY. 


The  migration  of  farming  population  to  the  northeastern 
part  of  Maine  has  widened  the  settled  area  to  a  marked  ex- 
tent, probably  more  than  has  been  done  during  any  previous 
decade.  The  vacant  space  in  the  Adirondack  region  of 
northern  New  York  has  been  lessened  in  size,  and  its  limits 
reduced  practically  to  the  actual  mountain  tract.  The  most 
notable  change,  however,  in  New  England  and  the  Middle 
States,  including  Ohio  and  Indiana,  has  been  the  increase 
in  density  of  population  and  the  migration  to  cities,  with 
the  consequent  increase  of  the  urban  population,  as  indicated 
by  the  number  and  the  size  of  the  spots  representing  tliese 
cities  upon  the  map.  Throughout  the  Southern  States  tliere 
is  to  be  noted  not  only  a  general  increase  in  the  density  of 
population  and  a  decrease  of  unsettled  areas,  but  a  greater 
approach  to  uniformity  of  settlement  throughout  the  wliole 
region.  The  unsettled  area  of  the  peninsula  of  Florida  has 
decreased  decidedly  while  the  vacant  spaces  heretofore  seen 
along  the  upper  coast  of  Florida  and  Louisiana  have  entirely 
disappeared.  Although  the  Appalachian  mountain  system  is 
still  distinctly  outlined  by  its  general  lighter  color  on  the 
map,  its  density  of  population  more  nearly  approaches  tiiat 
of  the  country  on  the  east  and  on  the  west.  In  Michigan 
there  is  seen  a  very  decided  increase  of  the  settled  region. 
Settlements  have  not  only  surrounded  the  head  of  the  lower 
peninsula,  but  they  leave  only  a  very  small  body  of  unsettled 
country  in  the  interior.  In  the  upper  peninsula  the  copper 
and  the  iron  interests,  and  the  railroads  which  subserve  tliein, 
have  peopled  quite  a  large  extent  of  territory.  In  Wisconsin 
the  unsettled  area  is  rapidly  decreasing  as  railroads  stretch 
their  arms  out  over  the  vacant  tracts.  In  Minnesota  and  in 
eastern  Dakota  the  building  of  railroads,  and  the  develop- 
ment of  the  latent  capabilities  of  this  region  in  the  cultiva- 
li'>*>  of  wheat,  have  caused  a  rapid  flow  of  settlement,  and 
J  V  lie  frjntier  line  of  population,  instead  of  returning  to 
}  ake  Mioi:igan,  as  it  did  ten  years  ago,  meets  the  boundary 
.i.ie  oi  the  British  posBessions  west  of  the  97th  meridian. 
Thr  set;'  ments  in  Kansas  and  Nebraska  have  made  great 
strides  over  the  plains,  reaching  at  several  points  the  boun- 


INCREASE  OF  POPULATION. 


397 


Jary  of  the  humid  region,  bo  that  their  westward  extension 
bevoud  this  point  is  to  bo  governed  hereafter  by  the  supply 
of  water  in  the  streams.  As  a  natural  result,  we  see  settle- 
ments following  these  streams  in  long  ribbons  of  population. 
In  Nebraska  these  narrow  belts  have  reached  the  western 
boundary  of  the  State  at  two  points:  one  upon  the  South 
Platte,  and  the  other  upon  the  Republican  River.  In  Kansas, 
too,  the  settlements  have  followed  the  Kansas  River  and  its 
liranclies  and  the  Arkansas  nearly  to  the  western  boundary 
of  the  State.  Texas  also  has  made  great  strides,  both  in  the 
extension  of  the  frontier  line  of  settlement  and  in  the  in- 
crease in  the  density  of  population,  due  both  to  the  building 
of  railroads  and  to  the  development  of  the  cattle,  sheep,  and 
agricultural  interests.  The  heavy  population  in  the  prairie 
portions  of  the  State  is  explained  by  the  railroads  which  now 
traverse  them.  In  Dakota,  besides  the  agricultural  region 
in  the  eastern  part  of  the  Territory,  we  note  the  formation 
of  a  body  of  settlement  in  the  Black  Hills,  in  the  southwest 
corner,  which,  in  1870,  was  a  part  of  the  reservation  of  the 
Sioux  Indians.  This  settlement  is  the  result  of  the  discov- 
ery of  valuable  gold  deposits.  In  Montana  there  appears  a 
great  extension  of  the  settled  area,  which,  as  it  is  mainly 
due  to  agricultural  interests,  is  foinid  chiefly  along  the 
courses  of  the  streams.  Mining  has,  however,  plaj'cd  not  a 
small  part  in  this  increase  in  settlement.  Idaho,  too,  shows 
a  decided  growth  from  the  same  causes.  The  small  settle- 
ments wliich,  in  1870,  were  located  about  Bo\s6  City,  and 
near  the  mouth  of  the  Clearwater,  have  now  extended  their 
areas  to  many  hundreds  of  square  miles.  The  settlement  in 
the  southeastern  corner  of  the  Territory  is  almost  purely  of 
Mormons,  and  has  not  made  a  marked  increase. 

Of  all  the  States  and  Territories  of  the  Cordilleran  region 
Colorado  has  made  the  greatest  stride  during  the  decade. 
From  a  narrow  strip  of  settlement,  extending  along  the  im- 
mediate base  of  the  Rocky  Mountains,  the  belt  has  increased 
80  that  it  comprises  the  whole  mountain  region,  besides  a 
great  extension  outward  upon  the  plains.  This  increase  is 
the  result  of  the  discovery  of  very  extensive  and  very  rich 


M'  - 

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Mi 

898 


ECONOMIC  HISTORY. 


mineral  deposits  about  Leadville,  producing  a  "stampede" 
second  only  to  that  of  '49  and  '50  to  California.     Miners 
have  spread  over  the  whole  mountain  region  till  every  range 
and  ridge  swarms  with  them.     New  Mexico  shows  but  little 
change,  although  the  recent  extension  of  railroads  in  the 
Territory  and  the  opening  up  of  mineral  resources  will,  no 
doubt,  in  the  near  future,  add  largely  to  its  population, 
Arizona,  too,  although  its  extent  of  settlement  has  increased 
somewhat,  is  but  just  commencing  to  enjoy  a  period  of  rapid 
development,  owing  to  the  extension  of  railroads  and  to  the 
suppression  of  hostile  Indians.     Utah  presents  us  with  a 
case  dissimilar  to  any  other  of  the  Territories,  a  case  of 
steady,  regular  growth,  due  almost  entirely  to  its  agricul- 
tural capabilities,  as  was  noted  above.     This  is  due  to  the 
policy  of  the  Mormon  Church,  which  has  steadily  discounte- 
nanced mining  and  speculation  in  all  forms,  and  has  encour- 
aged in  every  way  agricultural  pursuits.     Nevada  shows  a 
slight  extension  of  settlement,  due  mainly  to  the  gradual 
increase  in  the  agricultural  interest.     The  mining  industry 
is  probably  not  more  flourishing  at  present  in  this  State  than 
it  was  ten  years  ago,  and  the  population  dependent  upon  it 
is,  if  anything,  less  in  number.     In  California,  as  the  atten- 
tion of  the  people  has  become  devoted  more  and  more  to 
agricultural  pursuits,  at  the  expense  of  the  mining  and  cattle 
industries,  we  note  a  tendency  to  a  more  even  distribution 
of  the  inhabitants.     The  population  in  some  of  the  mining 
regions  has  decreased,  while  over  the  area  of  the  great  val- 
ley, and  in  the  fertile  valleys  of  the  Coast  ranges,  it  has 
increased.     In  Oregon  the  increase  has  been  mainly  in  the 
section  east  of  the  Cascade  range,  a  region  drained  by  the 
Des  Chutes  and  the  John  Day  rivers,  and  by  the  smaller 
tributaries  of  the  Snake,  —  a  region  which,  with  the  corres- 
ponding section  in  Washington  Territory,  is  now  coming  to 
the  front  as  a  wheat-producing  district     In  most  of  the  set- 
tled portions  here  spoken  of  irrigation  is  not  necessary  for 
the  cultivation  of  crops,  and  consequently  the  possibilities  of 
the  region  in  the  directton  of  agricultural  development  are 
very  great.     In  Washington  Territory,  which  in  1870  had 


INCREASE  OF  POPULATION. 


899 


been  scarcely  touched  by  immigration,  we  find  the  valley 
west  of  the  Cascade  Mountains  tolerably  well  settled  through- 
out, while  the  stream  of  settlement  has  poured  up  the 
Columbia  into  the  valleys  of  the  Walla  Walla  and  the  Snake 
rivers  and  the  great  plain  of  the  Columbia,  induced  thither 
bv  the  facilities  for  raising  cattle  and  by  the  great  profits  of 
wheat  cultivation. 

The  length  of  the  frontier  line  in  1880  is  8,887  miles. 
The  area  included  between  the  frontier  line,  the  Atlantic 
and  the  Gulf  coast,  and  the  northern  boundary  is  1,898,945 
square  miles,  lying  between  26°  and  49°  north  latitude  and 
67°  and  102°  west  longitude.  From  this  must  be  deducted, 
for  unsettled  areas,  as  follows :  — 

Squan  MtlM. 

Maine 12,000 

New  York 2,200 

Michigan 10,200 

Wisconsin 10,200 

Minnesota 84,000 

Florida 20,800 

making  a  total  of  89,400  square  miles,  leaving  1,809,545 
square  miles. 

To  this  must  be  added  the  isolated  areas  of  settlement  in 
the  Cordilleran  region  and  the  extent  of  settlement  on  the 
Pacific  coast,  which  amount  in  the  aggregate  to  260,025 
square  miles,  making  a  total  settled  area  of  1,569,570  square 
miles.  The  population  is  50,155,788,  and  the  average  den- 
sity of  settlement  82  to  the  square  mile. 


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400 


ECONOMIC  HISTORY. 


THE  FACTORY   SYSTEM. 

From  Wright's  Report  on  the  Factory  System  op  the  United 
States,  Tenth  Census,  Vol.  II.  pp.  537-541. 

At  the  time  of  the  agitation  of  their  independence  the 
desire  to  plant  the  mechanic  arts  in  this  country  became 
almost  a  passion, — certainly  a  feature  of  the  patriotism  of 
the  day.  Hon.  Edward  Everett,  in  an  address  on  American 
manufactures,  in  New  York,  in  1831,  stated:  — 

"The  first  measures  of  the  patriots  aimed  to  establish  their  in- 
dependence on  the  basis  of  the  productive  industry  and  laborious 
arts  of  the  country.  They  began  with  a  non-importation  agree- 
ment nearly  two  years  before  the  Declaration  of  Independence. 
That  agreement,  .  .  .  with  the  exception  of  the  Address  to  the 
People  of  America  and  Great  Britain,  was  the  only  positive  act  of 
the  first  Congress." 

In  this  country,  as  well  as  in  England,  the  germ  of  the 
textile  factory  existed  in  the  fulling  and  carding  mills;  the 
former,  dating  earlier,  being  the  mills  for  finishing  the  coarse 
cloths  woven  by  hand  in  the  homes  of  our  ancestors ;  in  the 
latter,  the  carding-mill,  the  wool  was  prepared  for  the  hand- 
wheel.  At  the  close  of  the  Revolution  the  domestic  system 
of  manufactures  prevailed  throughout  the  States. 

The  first  attempts  to  secure  the  spinning  machinery  which 
had  come  into  use  in  England  were  made  in  Philadelphia 
early  in  the  year  1775,  when  probably  the  first  spinning- 
jenny  ever  seen  in  America  was  exhibited  in  that  city.  Dur- 
ing the  war  the  manufacturers  of  Philadelphia  extended  their 
enterprises,  and  even  built  and  run  mills  which  writers  often 
call  factories,  but  they  can  hardly  be  classed  under  that  term. 
Similar  efforts,  all  preliminary  to  the  establishment  of  the 
factory  system,  were  made  in  Worcester,  Massachusetts,  in 
1780.  In  1781  the  British  Parliament,  determined  that  the 
textile  machinery  by  which  the  manufactures  of  England  were 


THE  FACTORY  SYSTEM. 


401 


being  rnpidly  extended,  and  which  the  continental  producers 
were  anxious  to  secure,  should  not  be  used  by  the  people  of 
America,  re-enacted  and  enlarged  the  scope  of  the  statute  of 
1T74  against  its  exportation.  By  21  George  III.,  c.  37,  it 
was  provided  that  any  person  who  packed  or  put  on  board, 
or  caused  to  be  brought  to  any  place  in  order  to  be  put  on 
any  vessel  for  exportation,  any  machine,  engine,  tool,  press, 
paper,  utensil,  or  implement,  or  any  part  thereof,  which  now 
is  or  hereafter  may  be  used  in  the  woollen,  cotton,  linen,  or 
silk  manufacture  of  the  kingdom,  or  goods  wherein  wool, 
cotton,  linen,  or  silk  are  used,  or  any  model  or  plan  of  such 
machinery,  tool,  engine,  press,  utensil,  or  implement,  should 
forfeit  every  such  machine,  etc.,  and  all  goods  packed  there- 
with, and  £200,  and  suffer  imprisonment  for  one  year.  In 
1782  a  law  was  enacted  which  prohibited,  under  penalty  of 
£500,  the  exportation  or  the  attempt  to  export  "blocks, 
plates,  engines,  tools,  or  utensils  used  in  or  which  arc  proper 
for  the  preparing  or  finishing  of  the  calico,  cotton,  muslin,  or 
linen  printing  manufactures,  or  any  part  thereof."  The 
same  act  prohibited  the  transportation  of  tools  employed  in 
the  iron  and  steel  manufactures.  Acts  were  also  passed  in- 
terdicting the  emigration  of  artificers.  All  these  laws  were 
enforced  with  great  vigilance,  and  were  of  course  serious 
obstacles  to  the  institution  of  the  new  system  of  manufacture 
in  America. 

The  manufacturers  of  this  country  were  thus  compelled 
either  to  smuggle  or  to  invent  their  machinery.  Both 
methods  were  practised  until  most  of  the  secrets  of  the 
manufacture  of  common  goods  were  made  available  here. 

The  planting  of  the  mf  ehanic  arts  in  this  country  became 
a  necessity  during  the  War  of  the  Revolution,  and  after- 
wards the  spirit  of  American  enterprise  demanded  that  New 
England  and  the  Middle  States  should  utilize  the  water- 
powers  which  they  possessed,  and  by  sush  utilization  supply 
the  people  with  home  manufactures. 

When  the  people  of  the  States  saw  that  the  Treaty  of 
Paris  had  not  brought  industrial  independence,  a  new  form 
of  expression  of  patriotism  took  the  place  of  military  service ; 

26 


1'  1  r 


fiif^w^wr^^^^p^ 


402 


ECONOMIC  HISTORY. 


w 


1.  -r. 


tt; 


and  associations  were  formed,  the  object  of  which  was  to 
discourage  the  use  of  British  goods;  and  as  the  Articles  of 
Confederation  did  not  provide  for  the  regulation  of  com- 
merce, the  Legislatures  of  the  States  were  besought  to  pro- 
tect home  manufacturer.  The  Constitution  of  1789  remedied 
the  defects  of  the  articles  in  this  respect,  and  gnvo  Congregg 
the  power  to  legislate  on  commercial  afTairs.  The  Consti- 
tution was  really  the  outcome  of  the  industrial  necessities  of 
the  people,  because  it  was  on  account  of  the  difficulties  and 
the  irritations  growing  out  of  the  various  commercial  regula- 
tions of  the  individual  States  that  a  convention  of  commis- 
sioners from  the  various  States  was  held  in  Annapolis  in  Sep- 
tember, 1786,  wnich  convention  recommended  the  one  that 
framed  the  new  or  present  Constitution  of  the  United  States. 

Of  course  those  industries  whose  products  were  called  for 
by  the  necessities  of  the  war  were  greatly  stimulated,  but  with 
peace  came  reaction  and  the  flooding  of  our  markets  with 
foreign  goods. 

The  second  act  under  the  Constitution  was  passed  July  4, 
1789,  with  this  preamble:  — 

"Whereas  it  is  necessary  for  the  support  of  the  government,  for 
the  discharge  of  the  debts  of  the  United  States,  and  for  the  encour* 
agement  and  the  protection  of  manufactures,  that  duties  be  laid  on 
goods,  wares,  and  merchandise  imported; 

**£e  it  enacted,  etc." 

Patriotism  and  statute  law  thus  paved  the  way  for  the 
importation  of  the  factory  system  of  industry,  and  so  its 
institution  here,  as  well  as  in  England,  was  the  result  of 
both  moral  and  economical  forces. 

As  early  as  1783,  before  the  adoption  of  the  Constitution 
of  the  United  States,  the  Legislature  of  Massachusetts 
offered  encouragement  for  the  introduction  of  machinery  for 
carding  and  spinning  by  granting  to  Robert  and  Alex- 
ander Barr  the  sum  of  ^£200  to  enable  them  to  complete  a 
roping-machine,  and  also  to  "  construct  such  other  machines 
as  are  necessary  for  the  purpose  of  carding,  roping,  and 
spinning  of  sheep's  wool,  as  well  as  of  cotton  wool. "   The 


THE  FACTORY  SYSTEM. 


403 


next  year  these  parties  were  granted  six  tickets  in  a  land- 
lottcrv,  —  others  engaged  in  the  invention  and  construction 
of  cotton-spinning  machines  at  Bridgcwater,  being  associ- 
ated with  the  Barrs,  who  came  to  Massachusetts  from  Scot- 
land lit  the  invitation  of  Hon.  Hugh  Orr,  of  Bridgewater, 
and  for  the  purpose  of  constructing  spinning-machines. 
There  is  no  doubt  that  the  machinery  built  by  them  was  the 
first  in  this  country  which  included  the  Arkwright  devices; 
the  first  factory,  however,  in  America  expressly  for  the 
manufacture  of  cotton  goods  was  erected  at  Beverly,  Massa- 
chusetts, in  1787.  This  enterprise  was  aided  by  the  Legis- 
lature. The  factory  at  Beverly  was  built  of  brick,  was 
driven  by  horse-power,  and  was  continucf'  in  operation  for 
several  years,  but  its  career  as  a  cotton-mill  was  brief,  and 
no  great  success  attended  it.  About  the  same  time  other 
attempts  had  been  made  in  Rhode  Island,  New  York,  and 
Pennsylvania,  but  principally  in  Rhode  Island  and  that  part 
of  Massachusetts  contiguous  to  Rhode  Island. 

The  honor  of  the  introduction  of  power-spinning  machines 
in  this  country,  and  of  their  early  use  here,  is  shared  by 
these  last-named  States;  for  while  Massachusetts  claims  to 
have  made  the  first  experiments  in  embodying  the  principles 
of  Arkwright's  inventions  and  the  first  cotton  factory  in 
America,  Rhode  Island  claims  the  first  factory  in  which 
perfected  machinery,  made  after  the  English  models,  was 
practically  employed.  This  was  the  factory  built  by  Samuel 
Slater,  in  1790,  in  Pawtucket,  Rhode  Island,  which  still 
stands  in  the  rear  of  Mill  Street  in  that  city,  and  the  hum 
of  cotton  machinery  can  still  be  heard  within  its  walls. 
Previous  to  1790  the  common  jenny  and  stock-card  had  been 
in  operation  upon  a  small  scale  in  various  parts  of  the 
United  States,  but  principally  in  Pennsylvania,  New  York, 
Rhode  Island,  and  Massachusetts ;  but  every  endeavor  to  in- 
trod  ice  the  system  of  spinning  known  as  water-frame  spin- 
ning, or  Arkwright's  method,  had  failed.  The  introduction 
of  this  system  was  the  work  of  Slater,  whom  President 
Jackson  designated  "the  father  of  American  manufactures." 
Samuel  Slater  was  born  in  Belper,    Derbyshire,  England, 


404 


ECONOMIC  HISTORY. 


June  9,  1768,  and  at  fourteen  years  of  age  was  bound  as  an 
apprentice  to  Jcdediah  Strutt,  Esq.,  a  manufacturer  of 
cotton  machinery  at  Milford,  near  Belper.  Strutt  was  for 
several  years  a  partner  of  Sir  Richard  Arkwright  in  the 
cotton-spinning  business;  so  young  Slater  had  every  oppor- 
tunity to  master  the  details  of  the  construction  of  the  cotton 
machinery  then  in  use  in  England ;  for  during  the  last  four 
or  five  years  of  his  apprenticeship  he  served  as  general  over- 
seer, not  only  in  making  machinery,  but  in  the  manufactur- 
ing department  of  Strutt's  factory.  Near  the  close  of  liis 
term  his  attention  was  drawn  to  the  wants  of  the  States  liv 
accidentally  seeing  a  notice  in  an  American  paper  of  the 
efforts  various  States  were  making  by  way  of  ofTerlng 
bounties  to  parties  for  the  production  of  cotton  machinery. 
Slater  knew  well  that  under  the  laws  of  England  he  could 
carry  neither  machines  nor  models  or  plans  of  machines  out 
of  the  coimtry;  so,  after  completing  his  full  time  with  Mr. 
Strutt,  he  continued  some  time  longer  with  hiin,  superin- 
tending some  new  works  Mr.  Sirutt  was  erecting.  'I'liis  he 
did  that  ho  might  so  perfect  his  knowledge  of  the  business 
in  every  department  that  he  could  construct  machinery  from 
memory  without  taking  plans,  models,  or  specilications. 
With  this  knowledge  Slater  embarked  at  London,  Septenil)er 
13,  1789,  for  New  York,  where  he  landed  November  17,  and 
at  once  sought  parties  interested  in  cotton  manufactures. 
Finding  the  works  of  the  New  York  Manufacturing  Com- 
pany, to  whom  he  was  introduced,  unsatisfactory,  he  corres- 
ponded with  Messrs.  Brown  &  Almy,  of  Providence,  who 
owned  some  crude  spinning-machines,  some  of  which  came 
from  the  factory  at  Beverly,  Massachusetts.  In  January, 
1790,  Slater  made  arrangements  with  Brown  &  Aluiy  to 
construct  machinery  on  the  English  plan.  This  he  did  iit 
Pawtuckct,  making  the  machinery  principally  with  his  nwii 
hands,  and  on  tlic  20th  of  December,  1790,  he  started  threu 
cards,  drawing  and  roving,  together  with  seventy-two  spin- 
dles, working  entirely  on  the  Arkwright  plan,  and  being  the 
first  of  the  kind  ever  operated  in  America. 

It  is  generally  supposed  that  the  course  of  the  progress  ot 


THE  FACTORY  SYSTEM. 


405 


the  manufacture  of  cotton  goods  in  this  country  is  quite 
clearly  marked;  yet  a  careful  study  of  the  subject  seems 
rather  to  dissipate  the  line  of  advancement  instead  of  bring- 
mr  it  into  clearer  view.  Dr.  Leander  Bishop,  in  his  exceed- 
ingly valuable  work,  "A  History  of  American  Manufactures," 
in  s|)caking  of  the  clothing  manufacture,  states  that  a  corres- 
pondent of  the  "  American  Museum, "  writing  from  Charles- 
ton, South  Carolina,  in  July,  1790,  refers  to  a  gentleman 
who  "had  completed  and  had  in  operation  on  the  High  Hills 
of  the  Santee  near  Statcsburg,  ginning,  carding,  and  other 
machines  driven  by  water,  and  also  spinning-machines,  with 
eighty-four  spindles  each,  with  every  necessary  article  for 
manufacturing  cotton.  M  this  information  be  correct,  the 
attempt  to  manufacture  by  machinery  the  cotton  which  they 
were  then  beginning  to  cultivate  extensively  was  nearly  as 
early  as  those  of  the  Northern  States. " 

Certainly  this  bit  of  history  of  attempts  in  Southern 
States,  of  the  efforts  of  Saiouel  Wetherell,  of  Philadelphia, 
of  the  Beverly  Company  in  Massachusetts,  of  Moses  Brown 
at  Providence,  R.  I.,  all  before  Slater's  coming,  to  introduce 
spinning  by  power,  illustrates  the  difficulty  of  locating  the 
origin  of  an  institution  when  a  country  of  such  proportions 
as  our  own  constitutes  the  field.  It  is  safe,  historically,  to 
start  with  Slater  as  the  first  to  erect  cotton  machinery  on  the 
English  plan,  and  to  give  the  factory  system  1790  as  its 
birthday. 

The  progress  of  the  system  has  been  uninterrupted  from 
1190,  save  by  temporary  causes  and  for  brief  periods ;  but 
tliesc  interruptions  only  gave  an  increased  impetus  to  its 
lirowth.  In  1792,  by  the  invention  of  the  cotton-gin,  an 
Americrn,  Eli  Whitney,  of  Massachusetts,  residing  tempo- 
rarily in  Georgia,  contributed  as  much  toward  the  growth  of 
the  factory  system  as  England  had  contributed  by  the  splen- 
ilid  series  of  inventions  which  made  the  cotton-manufacturing 
machinery  of  the  system. 

The  alarm  of  the  people  at  the  increase  in  the  demand  for 
foreign  proods  took  shape  again  in  1794  and  the  decade  fol- 
lowing, and  by  patriotic  appeals  to  all  classes,  societies  and 
clubs  were  formed  pledged  to  wear  only  home-made  goods. 


mmm9 


406 


ECONOMIC  HISTORY. 


Congress  was  called  upon  to  restrict  importations.  The  re- 
sult of  all  these  e£Forts  and  influences  stimulated  the  manu- 
facture of  cotton  and  other  textiles.  The  water  privileges  of 
New  England  and  the  Middle  States  offered  to  t  rising 
men  the  inducement  to  build  factories  for  the  iiin^  of 
yarn  for  the  household  manufacture  of  cloth.  Av  nie  close 
of  1809,  according  to  a  report  made  by  Mr.  Albert  Gallatin, 
Secretary  of  the  Treasury  in  1810,  eighty-seven  cotton  fac- 
tories had  been  erected  in  the  United  States,  which,  when  in 
operation,  would  employ  80,000  spindles. 

The  perfect  factory,  the  scientific  arrangement  of  parts  for 
the  successive  processes  necessary  for  the  manipulation  of  the 
raw  material  till  it  came  out  finished  goods,  had  not  yet 
been  constructed.  As  1  have  said,  the  power-loom  did  not 
come  into  use  in  England  till  about  1806,  while  in  this  coun- 
try it  was  not  used  at  all  till  after  the  war  of  1812.  In  Eng- 
land even  it  had  not  been  used  in  the  same  factory  with  the 
spinning-machines.  In  fact,  for  many  years  the  custom  of 
spinning  the  yarn  under  one  management  and  weaving  the 
cloth  under  another  has  prevailed  in  England. 

In  1811  Mr.  Francis  C.  Lowell,  of  Boston,  visited  England 
and  spent  much  time  in  inspecting  cotton  factories,  for  the 
purpose  of  obtaining  all  possible  information  relative  to  cot- 
ton manufacture,  with  a  view  to  the  introduction  of  improved 
machinery  in  the  United  States.  The  power-loom  was  being 
introduced  in  Great  Britain  at  this  time,  but  its  construction 
was  kept  very  secret,  and  public  opinion  was  not  very  favor- 
able to  its  success.  Mr.  Lowell  learned  all  he  could  regard- 
ing the  new  machine,  and  determined  to  perfect  it  himself. 
He  returned  to  the  States  in  1814,  and  at  once  began  his 
experiments  on  Broad  Street,  Boston.  His  first  move  was 
to  seciu-e  the  skill  of  Paul  Moody,  of  Amesbury,  Mass.,  a 
well-known  mechanic.  By  and  through  the  encouragement 
of  Mr.  Nathan  Appletpn,  a  company  had  been  organized  liy 
Mr.  Lowell  and  Mr.  Patrick  T.  Jackson,  with  Mr.  Appletou 
as  one  of  its  directors,  for  the  establishment  of  a  cotton 
manufactory,  to  be  located  in  Waltham,  Mass.,  on  a  water 
privilege  they  had  purchased.  This  factory  was  completed 
in  the  autumn  of  1814,  and  in  it  was  placed  the  loom  per- 


THE  FACTORY  SYSTEM. 


407 


fected  by  Mr.  Lowell,  which  differed  much  from  the  English 
looms.  Mr.  Lowell  had  neither  plans  nor  models  for  his 
factory  and  looms,  but  in  the  year  named  the  company  set 
up  a  full  set  of  machinery  for  weaving  and  spinning,  there 
being  1,700  spindles;  and  this  factory  at  Waltham  was  the 
first  in  the  world,  so  far  as  record  shows,  in  which  all  the 
processes  involved  in  the  manufacture  of  goods,  from  the  raw 
material  to  the  finished  product,  were  carried  on  in  one 
establishment  by  successive  steps,  mathematically  consid- 
ered, under  one  harmonious  system.  Mr.  Francis  C.  Lowell, 
aided  by  Mr.  Jackson,  is  unquestionably  entitled  to  the 
credit  of  arranging  this  admirable  system ;  and  it  is  remarka- 
ble how  lew  changes  have  been  made  in  the  arrangements 
established  by  him  in  this  factory  at  Waltham. 

So  America  furnished  the  stone  which  completed  the  in- 
dustrial arch  of  the  factory  system  of  manufactures. 

The  growth  of  the  factory  system  [is  well]  illustrated  by 
the  cotton  manufacture.  After  the  success  of  the  power- 
loom,  the  cotton  manufacture  took  rapid  strides,  both  in 
Europe  and  America.  The  hand-loom  and  the  hand-weaver 
were  rapidly  displaced.  Factories  sprung  up  on  all  the 
streams  of  Yorkshire  and  Lancashire,  in  England,  while  in 
this  country  the  activity  of  the  promoters  of  the  industry 
won  them  wealth,  and  won  cities  from  barren  pastures. 
They  erected  Lowell,  Lawrence,  Holyoke,  Fall  River,  and 
many  other  thriving  cities  and  towns,  and  now  in  this  gener- 
ation the  industry  is  taking  root  upon  the  banks  of  Southern 
streams.  The  progressive  steps  of  this  great  trade  are  shown 
by  the  tables  which  follow.  The  facts  for  Great  Britain  for 
the  year  1833  are  taken  from  Baincs'  "History  of  Cotton 
Manufacture,"  and  have  been  corroborated  as  far  as  possible 
from  other  sources;  they  constitute  the  most  reliable  data 
obtainable  for  that  period.  For  1831,  for  the  United  States, 
we  have  the  census  returns  and  other  sources,  none  of  them 
very  accurate,  yet  they  give  the  best  approximate  figures. 

It  will  be  observed  that  the  number  of  cotton  factories  in 
this  country  was  801  in  1831,  1,240  in  1840,  1,074  in  1850, 
and  that  since  1850  there  has  been  a  constant  decrease  in 
the  number  of  establishments.     This  is  the  result  of  consoli- 


III      ■j--"-- 


408 


ECONOMIC  HISTORY. 


v 


K|: 


i 


datiun  and  the  establishment  of  large  works,  the  smaller 
factories  being  closed  or  united  with  the  large  ones.  *  While 
the  number  of  factories  has  decreased,  the  consumption  of 
cotton  and  the  production  of  goods  has  steadily  increased. 
Perhaps  the  best  gauge  for  the  progress  of  the  industry  is  to 
be  found  in  the  quantity  of  cotton  consumed  per  capita  of 
the  population.  In  Great  Britain,  in  1831,  the  home  con- 
sumption of  cotton  per  capita  (excluding  the  proportion  for 
the  export  trade)  was  6.62  pounds;  in  1881  it  was  7.75 
pounds;  in  the  United  States,  for  1830,  it  was  5.9  pounds; 
in  1880  it  was  18.91  pounds.  That  is,  the  clothing  of  the 
people  of  this  country  in  1830  required  5.9  pounds  of  cotton 
per  annum  and  now  it  requires  13.91  pounds. 

If  we  take  the  per  capita  consumption  of  the  factories, 
including  exports  and  home  consumption,  the  proportion  for 
Great  Britain  in  1831  was  16.15  pounds;  in  1881,  40.8 
pounds ;  for  the  United  States,  in  1831,  it  was,  on  this  basis. 
6.1  pounds;  in  1880  it  had  risen  to  14.96  pounds.  The 
ratios  given  as  to  spindles  to  persons  employed,  capital  to 
spindles,  product  to  spindles,  capital  to  product,  product  to 
persons  employed,  while  in  some  sense  fallacious,  and  more 
valuable  to  the  expert  than  to  the  general  reader,  yet  are 
true  for  the  time  given  and  the  existing  circumstances,  and 
certainly  show  the  change  of  circumstances.  The  ratio  of 
consumption  to  spindles  is  of  course  influenced  largely  by  the 
number  of  the  yarn  produced,  and  man)  of  the  Briti.sli  mills 
spin  finer  numbers  than  do  the  mills  of  this  country;  but 
whatever  may  be  the  cause,  the  ratio  stands  as  given,  and 
shows  that  the  attendant  circumstances,  either  of  macliincr}- 
or  kind  of  product,  or  of  some  other  matter,  vary  as  to  the 
two  countries. 


1  The  number  of  cotton  factories  for  18P^  should  be  increased  by  the  num- 
ber of  mills  engaged  in  wor&ing  raw  cotton,  waste,  or  cotton  yarn  into  hosiery, 
webbing,  tapes,  fancy  fabrics,  or  mixed  goods,  or  other  fabrics  which  are  not 
sold  as  specific  manufactures  of  cotton  or  of  wool ;  some  of  these  work  both 
fibres,  but  belong  more  in  the  class  of  cotton  manufactures  than  in  any  other. 
These  establishments,  249  in  all,  in  1880,  have  without  doubt  been  included  in 
the  list  of  cotton-mills  heretofore ;  so  that  now  the  total  number,  to  correspond 
with  the  past,  should  be  1,006  cotton  factories  in  the  United  States  in  1880. 


THE  FACTORY  SYSTEM. 


409 


,  the  smaller 
oncs.^    While 
ousumption  of 
lily  increased. 
)  industry  is  to 
I  per  capita  of 
the  home  con- 
I  proportion  for 
Jl   it  was  7.75 
yas  5.9  pounds; 
clothing  of  the 
younds  oi  cotton 

ds. 

if  the  factories, 
e  proportion  for 
in  1881,  40.8 
18,  on  this  basis. 
;  pounds.     The 
loyed,  capital  to 
(duct,  product  to 
icious,  and  more 
.  reader,  yet  are 
•cumstanccs,  and 
The  ratio  of 
ted  largely  by  the 
the  British  mills 
is  country;  but 
18  as  given,  and 
tor  of  machinery 
•  vary  as  to  the 

Lreasedbythenutn- 
Ion  yarn  into  hosiery, 
lbric8  which  are  not 
te  of  these  work  both 

]e8  than  in  any  other 
Lbt  been  included  in 
Imber,  to  correspond 
Id  States  in  1880. 


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410 


ECONOMIC  HISTORY. 


THE  COTTON  MANUFACTURES. 


Fkom  Atkinson' 


.'    iCtRT  ON  THE  COTTON   MANUFACTURES,  Tenth 

Census,  Vol.  II.  pp.  946-955. 


The  cotton  manufacture  of  the  United  States  may  be  now 
considered  more  firmly  established  than  ever  before.  The 
method  on  which  'he  Imsiness  is  conducted  in  the  United 
States  varies  groaJv  )ioia  that  of  any  other  country;  and 
this  difference  aritieii  iv  u/nly  from  a  difference  not  only  in 
the  habits  and  customs  oi  ti.e  people,  but  also  in  their  con- 
dition and  inteii^j.'  nee 

The  home  market  is  lj  urjut  ipc'^nt  one,  and  may  long 
continue  to  be  so,  although  the  .export  demand  for  our  fabrics 
now  takes  from  7  to  8  per  cent  of  our  annual  product,  and  is 
likely  to  increase. 

In  contrast  with  the  cotton  manufacturer  of  Great  Britain, 
our  principal  rival,  we  are  therefore  called  upon  to  meet  the 
demands  of  an  intelligent  class  of  customers,  living  under 
substantially  uniform  conditions,  and  varying  but  little  in 
their  requirements.  Hence  we  are  not  called  upon  for  the 
great  variety  of  fabrics  that  must  be  supplied  by  Great 
Britain.  In  consequence  of  this  demand  for  a  groat  variety 
of  fabrics  the  work  of  the  cotton  manufacturer  of  England  is 
much  more  divided  than  with  us.  With  the  exception  of  a 
few  large  establishments,  working  mainly  to  supply  the  home 
market,  few  goods  are  known  in  England  by  the  name  of  the 
factory  in  which  they  are  made,  nor  are  they  sold  under  the 
name  of  the  manufacturer;  but  to  a  very  large  extent  the 
yarn  is  spun  in  one  establishment,  woven  in  another,  and 
finished  in  a  third.  The  gray  cloth  is  sold  to  the  ware- 
houseman, or  to  the  merchant,  to  be  stamped  and  packed  by 
him,  or  to  be  dyed,  bleached,  or  printed  under  his  direction. 
If  English  goods  had  been  sold  under  the  name  and  stamp  of 
the  manufacturer,  as  cotton  goods  are  in  the  United  States, 


THE  COTTON  MANUFACTURES. 


411 


perhaps  the  substitution  of  clay  for  cotton  might  not  have 
been  carried  to  so  great  an  extent.  In  the  United  States 
cotton  goods  are  spun  and  woven  in  the  same  factory,  and 
whether  sold  in  the  gray  or  bleached,  they  are  almost  all 
stamped  and  marketed  under  the  name  of  the  factory  in 
which  they  are  made.  Each  factory,  therefore,  has  its  repu- 
tation to  sustain,  and  whether  the  fabric  be  coarse  or  fine 
it  is  the  effort  of  every  one  to  make  it  good  of  its  kind. 

The  same  rule  applies  to  printed  calicoes.  These  are 
marketed  under  the  name  of  the  works  in  which  they  have 
been  printed,  and  the  reputation  and  permanent  existence  of 
these  works  rest  upon  uniformity  in  quality,  excellence  in 
color  and  style,  and  constant  progress  in  the  art  of  design. 

We  may  not  claim  to  be  more  honest  than  our  rivals, 
but  it  is  a  great  error  to  suppose  that  it  is  permanently  profit- 
able to  make  an  article  that  is  not  what  it  purports  to  be. 
A  cotton  fabric  may  be  of  a  low  grade,  and  may  be  intended 
to  sell  at  a  low  price,  but  yet  it  is  not  profitable  to  substitute 
clay  for  cotton ;  the  fabric,  whatever  it  is,  has  its  name  and 
reputation,  and  must  be  true  to  them,  or  else  the  demand  for 
it  will  sooner  or  later  cease.  Even  goods  that  are  made  for 
linings,  and  that  need  to  be  starched  and  stiffened  in  order 
to  be  used,  must  have  a  uniform  quality  in  the  fabric  itself 
to  hold  a  permanent  place  in  our  market.  Dyed  goods  that 
require  to  be  woven  on  heavily-sized  warps  cannot,  except  by 
rule,  be  loaded  with  sizing.  If  an  attempt  is  made  to  intro- 
duce an  article  in  which  clay  has  been  added  to  make  it 
heavier,  it  is  immediately  detected,  because  the  use  of 
sewing-machines  is  almost  universal,  and  the  clay  in  the 
fabric  heats  the  needle  and  exposes  the  fraud. 

In  stating  those  conditions  under  which  the  manufacture 
of  cotton  is  conducted  in  the  United  States  for  the  home  de- 
mand, it  is  not  intended  to  imply  that  the  use  of  a  foreign 
substance  to  give  additional  weight  to  a  cotton  fabric  is,  of 
necessity,  a  fraud.  For  instance,  there  is  a  very  large  de- 
mand in  China  for  materials  for  the  grave-clothes  of  corpses, 
and  for  this  use  "  earth  to  earth,  and  dust  to  dust "  may  be 
considered  a  legitimate  rule,  even  if  the  earth  is  conveyed  in 


412 


ECONOMIC  HISTORY. 


W 


« 


the  fabric  which  is  nominally  made  of  cotton.  Some  of  the 
finest  cotton  fabrics  yet  made  in  the  United  States,  which 
closely  resemble  silk,  are  used  mainly  for  lining  coffins. 

The  principal  market  for  our  own  fabrics  is  found  among 
the  thrifty  working-people,  who  constitute  the  great  mass  of 
our  population. 

It  has  therefore  happened  that,  although  we  have  not  until 
recently  undertaken  the  manufacture  of  very  fine  fabrics,  the 
average  quality  of  the  fabrics  that  we  do  make  is  better 
than  that  of  any  other  nation,  with  the  possible  exception  of 
France.     It  is  for  the  wants  of  the  million  that  our  cotton 
factories  are  mainly  worked,  and  we  have  ceased  to  import 
staple  goods,  and  shall  never  be  likely  to  resume  their  im- 
port.    On  the  other  hand,  we  may  for  a  long  period  continue 
to  import  the  finer  goods  that  depend  mainly  on  fasliion  and 
style  for  their  use,  and  that  are  purely  articles  of  luxury. 
As  has  been  stated,  the  substantial  fabrics  that  constitute 
the  main  part  of  our  cotton  manufacture,  and  that  arc  used 
by  the  masses  of  the  people,  are  of  the  best  of  their  kind, 
with  the  possible  exception  of  those  made  in  France.    The 
French  peasantry  are  a  sagacious  and  truly  economical  race, 
and  will  not  buy  a  poor  fabric  if  they  can  get  a  good  one; 
hence,  the  cotton  fabrics  for  their  use  are  of  a  very  substan- 
tial kind,  and  are  much  more  free  from  adulteration  than 
those  of  any  other  country  in  Europe.     The  common  cotton 
fabrics  of  England,  Belgium,  and  Germany  could  hardly  be 
sold  in  the  United  States  at  any  price. 

The  finest  printed  calicoes  of  France  and  England  may  be 
the  best  of  their  kind;  but  the  printed  calicoes  for  the  use 
of  the  multitude,  and  which  constitute  the  really  important 
branch  of  this  department  of  the  manufacture,  are  of  niucli 
better  quality  in  the  United  States  than  in  Europe,  and  are 
also  of  finer  colors  and  of  more  varied  styles. 

In  fact,  one  of  the  chief  obstacles  that  it  has  been  neces- 
sary to  overcome  in  the  introduction  of  unbleached  American 
cotton  fabrics  in  the  English  market,  and  in  other  markets 
heretofore  supplied  by  England,  has  been  their  apparently 
open  texture,  owing  to  the  absence  of  heavy  sizing.    Ie  thf 


THE  COTTON  MANUFACTURES. 


418 


United  States  the  sizing  used  upon  the  warp,  and  which  is 
necessary  in  order  to  weave  it,  is  made  from  corn  or  potato 
starch,  free  from  any  substance  intending  to  make  it  heavier. 
In  the  gray  cloth  the  sizing,  therefore,  constitutes  only  2J 
to  5  per  cent  of  the  weight,  and  when  the  fabric  is  washed 
it  shrinks  more  in  measure  than  it  loses  in  weight;  hence  a 
square  yard  washed  and  dried  without  stretching  will  be 
heavier  than  a  square  yard  taken  directly  from  the  loom. 

In  England,  on  the  other  hand,  even  the  pure  sizing  is 
made  from  wheat  flour,  which  is  very  glutinous;  and  the 
fabrics  thus  woven,  even  where  no  adulteration  is  intended, 
lose  from  10  to  12  per  cent  of  their  weight  on  the  first  wash- 
Thcse  pure  goods  are,  however,  made  chiefly  for  the 


inir, 


liome  consumption  of  the  richer  classes  of  England.  The 
greater  part  of  the  English  cotton  fabrics,  exported  or  used 
by  the  working-classes,  are  loaded  with  from  10  to  40  per 
cent  of  clay  and  other  substances.  The  art  of  sizing  has 
been  highly  perfected  in  England,  and  has  been  made  the 
subject  of  very  numerous  patents;  and,  as  the  use  of  clay 
and  flour  to  the  extent  of  100  pounds  to  each  100  pounds  of 
cotton-warp  yarn  involves  great  danger  of  mildew,  many 
ingenious  chemical  applications  have  also  been  patented  to 
serve  as  antiseptics,  such  as  chloride  of  zinc,  chloride  of 
calcium,  common  salt,  white  vitriol,  etc.  These  various 
antiseptics  are  compounded  with  flour,  gypsum,  soapstone, 
china  cla)',  and  other  heavy  substances  in  various  ways. 
The  English  text-books  upon  the  art  of  sizing  are  instructive 
and  suggestive,  especially  in  respect  to  the  rules  for  the  pur- 
chase of  the  most  glutinous  kinds  of  flour,  and  for  the 
detection  of  adulteration  in  flour,  it  being  obvious  that  un- 
less the  flour  is  pure  and  well  adapted  to  the  purpose,  it 
would  be  necessary  to  use  cotton  instead  of  clay  to  make  up 
the  weight  of  the  fabric. 

It  will,  of  course,  take  a  good  deal  of  time  to  accustom 
buyers  to  the  more  open  texture  of  cotton  fabrics  in  which 
no  clay  is  used ;  but  as  time  passes  American  fabrics  are 
being  steadily  substituted  for  those  previously  used  by  for- 
eign nations,  especially  in  China. 


m 


! 


1/  ill  / 


i:'l«' .  i  ; 


T-T-r 


414 


ECONOMIC  HISTORY. 


te 


't 
I'. 


■i^' 


-m 


Since  the  year  1860  the  cotton  manufacture  of  the  United 
States  has  been  exposed  to  greater  vicissitudes  than  am 
other  important  branch  of  the  national  industry,  and  the 
wonder  is,  not  that  there  should  have  been  some  disasters, 
but  that  it  should  have  survived  at  all  in  the  hands  of  its 
original  owners.  In  1860  the  whole  number  of  spindles  in 
the  United  States  was  5,235,000.  From  1857  to  1860  the 
cost  of  constructing  a  spinning  and  weaving  factory  on  the 
medium  fabrics  woven  of  No.  25  yarn  was  from  116  to  ?20 
per  spindle  (the  number  designates  the  number  of  skeins  of 
840  yards  of  yarn  each  in  one  pound).  The  value  of  a  bale 
of  cotton  of  480  pounds  was  from  140  to  |50.  Then  came 
the  combined  effects  of  war,  paper  money,  and  scarcity  of 
cotton.  At  one  period  more  than  two  thirds  of  the  cotton 
machinery  of  the  United  States  was  stopped ;  the  value  of 
a  bale  of  cotton  rose  to  over  i900,  and  the  price  of  some 
kinds  of  goods  was  seven  to  eight  times  the  present  price. 
A  little  later  new  mills  were  constructed  which  cost  from 
$80  to  $40  per  spindle. 

At  the  date  of  the  census  the  number  of  spindles  operated 
in  the  specific  manufacture  of  cotton  fabrics  was  10,653,435; 
but  the  spindle  has  changed  in  its  productive  power,  and  each 
spindle  of  1880  was  much  more  effective  than  that  of  1860, 
The  value  of  the  bale  of  cotton  was  again  from  |40  to  8oO; 
the  standard  printing-cloth,  which  reached  33  cents  a  yard 
during  the  war,  was  worth  4  cents ;  the  No.  25  mill  for 
spinning  and  weaving  could  be  built  for  from  $14  to  818 
per  spindle ;  our  export  of  cotton  fabrics  was  more  in  value 
and  much  more  in  quantity  than  in  1860,  and  the  only 
check  to  its  steady  and  profitable  increase  was  the  renewal 
of  the  home  demand.  Such  have  been  the  changes  and  fluc- 
tuations ;  yet,  despite  them  all,  not  one  spindle  in  ten  has 
passed  from  the  ownership  of  the  person,  firm,  or  corpora- 
tion in  whose  possession  it  was  in  1860,  except  in  the  regu- 
lar process  of  bequest  or  voluntary  sale. 

During  the  period  of  inflation  or  of  great  vicissitude,  the 
attention  of  the  managers  of  the  property  was  of  necessity 
devoted  to  other  matters  than  the  improvements  and  minute 


THE  COTTON  MANUFACTURES. 


415 


rc  of  tho  United 
itudes  than  any 
duatry,  and  the 
I  some  disasters, 

the  hands  of  its 
er  of  spindles  in 
L857  to  1860  the 
ig  factory  on  the 

from  116  to  820 
tnber  of  skeins  of 
le  value  of  a  bale 
150.  Then  came 
,  and  scarcity  of 
rds  of  the  cotton 
jed ;  the  value  of 
the  price  of  some 
the  present  price. 

which  cost  from 

spindles  operated 
was  10,653,435; 
'e  power,  and  each 
:han  that  of  1860, 
from  $10  to  850; 
33  cents  a  yard 
No.   25  mill  for 
from  811  to  818 
.as  more  in  value 
;0,   and  the  only 
.  was  the  renewal 
changes  and  flue- 
dndle  in  ten  has 
firm,  or  corpora- 
;cept  in  the  regu- 

It  vicissitude,  the 
]  was  of  necessity 
nentB  and  minute 


savings  in  which  the  profit  of  the  business  now  consists;  but 
during  tho  last  few  years  very  great  improvements  have  been 
made,  and  the  lesson  of  economy  and  saving  has  been 
learned.  Tho  best  example  that  can  be  cited  may  be  found 
in  the  record  of  one  great  factory  working  upon  coarse  and 
substantial  fabrics,  and  consuming  more  than  20,000  bales 
of  cotton  a  year.  Sixty  per  cent  of  its  products  are  sold  for 
export  to  various  parts  of  the  world.  The  proportion  of 
operatives  to  each  1,000  spindles  has  been  decreased  43  per 
cent,  or  from  26  J  to  15.  The  wages  of  women,  who  consti- 
tute more  than  two  thirds  of  the  operatives,  have  been  in- 
creased 33  per  cent.  The  cost  of  making  the  cloth,  aside 
from  the  material  used,  has  been  decreased  21  per  cent. 

In  1860  the  average  product  of  one  operative,  working 
one  year  was  5,317  pounds;  in  1880,  7,928  pounds  of  drill, 
such  as  is  exported  to  China.  Assuming  5  pounds,  or  about 
16  yards,  as  the  annual  requirement  of  a  Chinaman  for 
dress,  in  1860  one  Lowell  operative  working  one  year  clothed 
1,063  Chinese;  in  1880  one  could  supply  1,586.  It  will  be 
obvious  that  no  hand  spinning  and  weaving  can  compete 
with  this  product  of  machinery;  yet  the  machine-made 
fabrics  of  Europe  and  America  combined  have  as  yet  reached 
only  six  or  eight  in  a  hundred  of  the  Chinese.  How  soon  the 
rest  will  be  clothed  in  cotton  fabrics  made  by  machinery  from 
American  cotton,  therefore,  depends  but  little  on  whether 
the  wages  of  the  Lowell  factory  girl  be  $4  or  16  per  week, 
but  rather  on  what  exchangeable  products  the  Chinese  can 
produce  better  or  cheaper  than  we  can.  The  more  tea,  silk, 
sugar,  and  other  commodities  we  buy  from  them,  the  more 
cotton  fabrics  and  other  products  in  which  we  excel  will  they 
buy  from  us. 

It  has  been  held  that  the  cotton  of  America  must  be  more 
and  more  used  both  in  America  and  elsewhere,  and  that,  as 
time  goes  on,  almost  every  other  kind,  with  the  exception  of 
the  cotton  of  Egypt,  must  give  place  to  it.  To  what  extent 
may  the  same  pre-eminence  be  secured  for  the  cotton  fabrics 
of  the  United  States  in  the  markets  of  the  world  that  we 
liave  secured  in  respect  to  the  cotton  fibre  ? 


416 


ECONOMIC  HISTORY. 


In  tho  consideration  of  this  branch  of  tho  subjoct,  our 
attention  must  be  given  to  the  present  condition  of  compiti. 
tion  between  the  mills  of  the  Middle  and  Eastern  StutiHwith 
the  mills  of  Great  Britain. 

In  re-^pect  to  tho  Eastern  States  tho  cotton  fnotdiies  of 
Lowell  in  Massachusetts,  Manchester  in  New  HampHhin!,  Iii(J. 
deford  and  Lewiston  in  Maine,  may  be  considered  in  their  re- 
lation to  the  factories  of  Manchester,  Stockport,  Prestdii,  and 
Bolton  in  England.  For  tho  purposes  of  this  comparison  it 
may  be  assumed  that  there  can  be  no  permanent  advantage  of 
one  set  of  mills  over  the  other  in  respect  to  the  quality  and 
perfection  of  the  machinery.  At  any  given  time  some  ad- 
vantage may  be  claimed  and  admitted  on  either  side  in  some 
special  department  of  the  mill;  but  every  invention  or  im- 
provement will  sooner  or  later  be  adopted  on  both  sides,  and 
the  supremacy  in  the  art  of  converting  cotton  into  cloth  must 
ultimately  fall  to  that  country  or  section  which  possesses  the 
advantage  in  respect  to  the  conditions  offered  to  the  oper- 
atives, and  in  proximity  to  the  source  of  the  raw  material. 

The  best  conditions  of  life  for  the  operatives,  and  the  best 
prospects  of  improving  their  condition  and  that  of  their 
children,  are  of  the  gravest  importance.  The  factors  in  this 
problem  are  education,  shelter,  subsistence,  and  opportunity 
for  other  kinds  of  work.  In  respect  to  education,  the 
common-school  system  of  the  United  States  assures  a  thor- 
ough training  free  of  cost,  and  in  the  principal  towns  and 
cities  free  education  is  carried  to  the  point  of  preparing  the 
pupil  to  enter  a  university. 

In  respect  to  subsistence,  the  factories  of  New  England 
are  3,000  miles  nearer  the  wheat-fields  and  grazing-grounds 
of  the  West  than  those  of  Lancashire ;  and  so  long  as  Europe 
buys  food  of  America  our  own  mills  must  have  the  advantage 
of  proximity  to  the  Western  prairies.  In  respect  to  the 
rents  of  dwelling-houses  there  cannot  long  be  any  difference, 
if  there  is  any  at  present,  because  the  materials  for  construe- 
tion  are  most  abundant  in  America.  Opportunity  for  other  j 
work  than  that  of  the  factory  must  continue  for  many  gen- 
erations, and  until  this  continent  is  peopled. 


THE  COTTON  MANUFACTURES. 


417 


In  comparing  our  power  to  compote  with  England  wo  may 
claim  advantages  of  one  Icind,  and  in  comparing  with  the 
nation!)  of  cuntincntal  Europe  wo  may  claim  advantages  of 
another  kind,  in  some  respects  of  a  different  order.  In 
compt  .  with  England,  it  is  often  claimed  that  our  chief 
advania^ro  lies  in  a  certain  alleged  versatility  and  power  of 
adapting;  moans  to  ends,  and  in  great  quickness  of  perception 
on  tlio  part  of  working- people  in  respect  to  the  advantages 
to  1)0  |u;ainod  by  the  adoption  of  new  processes  or  inventions. 
If  wo  liavc  this  advantage,  there  must  be  special  causes  for 
it  in  the  influences  that  are  brought  to  bear  upon  the  opera- 
tives and  artisans  who  do  the  work ;  for  a  very  large  propor- 
tion of  them  arc  foreign-born,  or  are  the  children  of  foreign 
immigrants.  Why  should  they  work  with  any  more  zeal  or 
jiulirinont  here  than  in  the  countries  whence  they  have  come  ? 
Why  are  Irish  and  French-Canadian  factory  hands  to  be  re- 
lied on  for  more  steady  work,  larger  product,  better  disci- 
pline, '  more  cleanly  and  wholesome  conditions  of  lii'o 
than  t'  ratives  of  England,   Belgium,    and  Germany  ? 

To  me  it  appears  evident  that  these  advantages,  so  far  as  they 
exist,  are  due  mainly  to  the  following  circumstances:  — 

Fint.  Our  system  of  common  and  purely  secular  schools, 
attended  by  ihe  children  of  rich  and  poor  alike. 

Second.  Manhood  suffrage. 

Third.  The  easy  acquisition  of   land. 

Fourth.  The  habit  of  saving  small  sums  induced  by  the 
establishment  of  savings-banks  throughout  the  manufacturing 
States. 

Fifth.  The  absence  of  a  standing  army,  and  the  applica- 
tion of  the  revenue  derived  from  taxes  on  the  whole  to  useful 
purposes. 

In  rcs|)oct  to  the  first  of  these  influences,  the  public-school 
system,  the  foreign  observer  generally  takes  notice  only  of 
the  qnality  of  the  instruction  given,  and  though  he  may  find 
somothing  to  praise,  he  finds  also  much  to  blame.  He  finds 
in  many  cases  the  instruction  bad  and  the  subjects  often  ill- 
chosen,  and  he  wonders  at  the  misdirection  of  a  force  that 
■oight  bo  so  much  more  wisely  applied.     What  he  fails  to 

27 


f&'  '!■:'■ 


418 


ECONOMIC  HISTORY. 


notice  is  that  the  school  itself,  entirely  apart  from  its  instruc- 
tion,  is  the  great  educator  of  the  children  who  attend  it. 
The  school  is,  first  of  all,  no  respecter  of  persons ;  the  stupid 
son  of  a  rich  man,  led  in  every  class  by  the  son  of  a  me- 
chanic, cannot  in  after-life  look  down  on  him  as  an  inferior, 
whatever  the  conventional  position  of  che  two  may  be ;  or,  if 
the  rich  man's  son  has  brains  as  well  as  fortune,  the  poor 
man's  son  can  never  attribute  to  fortune  only  the  lead  that 
he  may  take  in  after-life.     The  school  is  thoroughly  demo- 
cratic, and  each  pupil  learns  in  it  that  it  depends  on  himself 
alone  what  place  he  may  take  in  after-life,  and  that,  al- 
though society  may  be   divided  into  planes,  there  is  no 
system  of  caste  and  no  barrier  in  the  way  of  social  success 
except  the  want  of  character  and  ability  to  attain  it.    The 
associations  of  the  common  school  utterly  prevent  anything 
like  servility  in  the  relation  of  classes  in  after-life;  and 
although  it  is  sometimes  made  a  little  too  manifest  that 
"one  man  is  as  good  as  another,  and  a  little  better,"  on  the 
part  of  those  who  are  more  eager  than  discreet  in  their  effort 
to  rise,  yet  on  the  whole  the  relation  of  the  various  classes, 
which  must  in  the  nature  of  things  always  and  everywhere 
exist,  is  that  of  mutual  respect,  and  anything  like  the  old- 
world  distinctions  of  caste  and  rank  would  seem  about  as 
absurd  to  one  as  to  the  other.     The  common  school  is  the 
solvent  of  race,  creed,  nationality,  and  condition. 

In  another  way  the  discipline  of  the  school  affects  the  pro- 
cesses of  manufacture.  In  the  schools,  cleanliness,  order, 
and  regular  habits  are  enforced,  with  deference  to  the 
teachers  and  respect  for  authority ;  and  in  these  later  years, 
this  is  coupled  with  the  teaching  of  music  and  drawing  in 
all  the  principal  towns  and  cities.  When  children  thus 
trained  are  removed  to  the  mill  or  the  workshop,  habits  of 
order  and  cleanliness,  with  some  aesthetic  taste,  are  already 
established.  Nothing  strikes  an  American  manufacturer 
with  so  much  surprise,  as  the  extreme  untidiness  of  the 
large  textile  mills  of  England  and  the  dreariness  of  the  fac- 
tory towns.  In  this  respect,  however,  it  must  be  confessed 
that  the  managers  of  the  New  England  mills  are  greatly 


THE  COTTON  MANUFACTURES. 


419 


aided  by  the  absence  of  smoke,  the  coal  commonly  used 
being  anthracite.  Much  surprise  is  often  expressed  by  our 
foreign  visitors,  at  the  amount  of  decoration  permitted  in 
the  fitting  of  stationary  and  locomotive  engines  and  in  much 
of  our  machinery ;  but,  bad  as  the  taste  displayed  may  some- 
times be,  it  is  nevertheless  a  fact  that  such  engines  or 
machines  are  better  cared  for  and  kept  in  better  repair  than 
where  no  individuality,  so  to  speak,  is  permitted.  On  one 
of  our  great  railways  the  attempt  was  not  long  since  made 
io  dispatch  the  locomotives  as  they  happened  to  arrive  at  the 
central  station,  sometimes  with  one  and  sometimes  with  an- 
other engine-driver;  but  the  immediate  and  great  increase 
in  the  repair  account  caused  the  corporation  to  return  very 
soon  to  the  customary  plan  of  giving  each  driver  a  particu- 
lar locomotive,  with  which  he  may  be  identified. 

The  instruction  of  the  school  also  gives  every  pupil  a 
superficial  knowledge,  if  no  more,  of  the  geography  and  re- 
sources of  the  country,  which  the  universal  habit  of  reading 
newspapers  keeps  up.  Hence  comes  the  almost  entire  ab- 
sence of  any  fixed  character  in  the  labor  of  the  country; 
every  boy  believes  that  he  can  achieve  success  somewhere 
else,  if  not  at  home.  No  congestion  of  labor  can  last  long. 
The  war  and  the  succeeding  railway  mania  combined  con- 
centrated population  at  certain  points  to  a  greater  extent 
than  ever  happened  before,  and  it  has  taken  more  than  five 
years  to  overcome  the  difficulty;  but  within  these  five  years 
a  million  or  more  new  inhabitants  in  Texas,  half  a  million 
or  more  in  Kansas,  and  probably  two  or  three  millions 
added  to  the  population  of  Nebraska,  Colorado,  Minnesota, 
and  the  far  Northwest,  indicate  that  the  evil  has  already 
found  a  remedy. 

It  is  already  apparent  that  a  very  slight  increase  in  the 
demand  for  skilled  workmen  in  certain  branches  of  employ- 
ment would  not  easily  be  met  in  the  Eastern  States  except 
by  drawing  upon  England  and  Germany.  During  the  years 
of  depression,  the  cessation  of  railway  building  and  the  use 
of  the  excess  of  railway  plant  existing  in  1873  has  caused 
the  dispersion  of  a  large  portion  of  the  trained  mechanics 


.'•■>•    ■  T  '  ".' — T^ 


r.''-» 


420 


ECONOMIC  HISTORY. 


and  artisans  who  then  did  the  work  of  supplying  this  de- 
mand ;  but  these  are  not  the  men  who  have  crowded  the  East- 
ern cities  and  caused  the  apparent  excess  of  laborers  out  of 
work.  Such  men  have  gone  back  to  the  land,  or  in  the  new 
States  and  Territories  have  found  other  ways  in  which  to 
apply  their  skill  and  energy,  and  they  will  not  return.  It 
may  be  that  the  greatest  danger  to  the  manufacturers  of 
England  will  not  be  in  our  competition  in  the  sale  of  goods 
in  neutral  markets,  but  in  our  competition  for  the  skilled 
workmen  and  artisans  who  make  these  goods,  when  we  offer 
them  equal  or  higher  wages  and  better  conditions  of  life  in 
the  work  that  will  very  soon  need  to  be  done  to  s\i\}\)\y  the 
increasing  demand  in  our  own  country. 

The  patent  system  may  here  be  cited  also  as  a  factor  in 
our  industrial  system.  It  has  been  carried  to  an  almost  ab- 
surd extreme,  so  that  it  is  not  safe  for  any  one  to  adopt  a 
new  method,  machine,  or  part  of  a  machine,  and  attempt  to 
use  it  quietly  and  without  taking  out  a  patent,  lest  sonic  sharp 
person,  seeing  it  in  use  and  not  published,  shall  himself 
secure  a  patent  and  come  back  to  the  real  inventor  with  a 
claim  for  ro3'alty. 

Manhood  suffrage,  subject  as  it  is  to  great  abuses,  and 
difTicult  as  it  has  made  the  problem  of  the  sclf-governnunt  of 
great  cities,  where  voters  do  not  meet  each  other,  as  in  the 
town-meeting,  face  to  face,  but  where  the  powers  of  govern- 
ment are  of  necessity  delegated  to  men  of  whom  the  voters 
can  have  little  personal  knowledge,  yet  works  distinctly  in 
the  direction  of  the  safety,  stability,  and  order  of  the  com- 
mimity.  Outside  of  two  or  three  of  the  very  largest  cities, 
where  there  are  concentrated  great  masses  of  illiterate  citi- 
zens, it  would  be  difficult  to  find  a  case  of  serious  abuse  of 
the  power  of  taxation  except  in  the  South  since  the  war,  and 
even  there  the  evil  is  now  mainly  abated. 

The  easy  acquisition  of  land  throughout  the  country  under 
simple  forms  of  conveyance,  registered  in  every  county,  gives 
a  motive  to  economy,  and  induces  habits  of  saving  that  are 
of  supreme  importance  in  their  effect  on  society.  In  the 
town  in  which  I  live, — and  in  which  I  can  remember  the 


THE  COTTON  MANUFACTURES. 


421 


lying  this  de- 
wded  the  East- 
laborers  out  of 
,  or  in  the  new 
rs  in  which  to 
lot  return.  It 
inufacturers  of 
le  sale  of  goods 
for  the  skilled 
,  when  we  ofl'er 
itions  of  life  in 
e  to  supply  the 


coming  of  the  first  Irishman  who  became  a  land-owner, —  out 
of  about  one  thousand  owners  of  real  estate,  over  two  hun- 
dred are  of  Irish  birth  or  extraction.  The  richest  one  among 
thera  came  from  Ireland  in  1846,  a  steerage  passenger.  He 
now  pays  taxes  on  property  of  the  value  of  #50,000,  almost 
all  in  real  estate.  His  son  is  superintendent  of  the  repairs 
of  highways,  and  is  one  of  the  most  efficient  members  of  the 
school  committee. 

During  the  last  thirty  years  the  factory  population  of  New 
England  has  passed  through  three  phases.  First  came  the 
sons  and  daughters  of  the  New  England  farmer ;  but  as  the 
sewing-machine  and  other  inventions  opened  new  demands 
for  womc'''^  work,  women  of  American  birth  passed  out  to 
easier  or  better-paid  employment,  while  the  men  took  up 
other  branches  requiring  more  individual  skill.  These 
places  were  taken  mainly  by  Irish,  with  a  few  Germans  and 
English.  But  as  the  Irish  saved  their  earnings,  and  as  the 
New  England  yeomen  emigrated  to  the  richer  lands  of  the 
great  West,  they  passed  out  of  the  mills  to  buy  up  the  de- 
serted farms  of  the  poorer  Northeastern  States,  where,  by 
their  persistent  industry  and  manual  labor,  they  achieved 
success,  and  gained  a  position  which  satisfied  them,  but 
with  which  the  native  New  Englander  is  no  longer  contented. 
Their  places  in  the  mills  are  now  being  more  and  more  taken 
by  the  French  Canadians,  who,  in  their  new  conditions  and 
surroundings,  show  little  of  the  stolid  and  unprogressive 
character  which  has  kept  them  so  long  contented  on  their 
little  strips  of  land  on  the  Saint  Lawrence  River.  In  the 
very  air  they  breathe  they  seem  to  imbibe  a  new  and  restless 
energy,  while  the  intelligence  shown  by  their  children  in 
the  schools  augurs  well  for  their  future  progress.  On  the 
whole  the  simplicity  of  our  system  of  land  tenure,  and  the 
ease  with  which  small  parcels  may  be  obtained,  must  be 
rated  among  the  most  important  factors  in  considering  our 
possible  advantage  over  other  countries. 

Next  in  our  list  comes  the  savings-bank.  In  1875,  out  of 
the  1,652,000  inhabitants  of  Massachusetts,  720,000  were 
depositors  in  savings-banks  to  the  amount  of  1238,000,000. 


422 


ECONOMIC  HISTORY. 


During  the  late  years  of  depression  the  deposit  has  decreased 
somewhat  in  amount,  but  the  decrease  has  been  chiefly  owini^ 
to  the  withdrawal  of  money  for  other  investment,  especially 
in  United  States  bonds.  There  have  been  some  failures  of 
banks  and  some  losses,  as  might  well  have  been  expected, 
but  they  have  been  less  than  in  any  other  branch  of  business; 
and  the  savings-bank  system  stands  firmly  based  on  well- 
earned  confidence,  and  offers  an  easy  means  of  saving  the 
smallest  sums  to  every  man,  woman,  and  child  in  the  State. 
At  the  present  time  the  deposits  in  the  savings-banks  of 
Massachusetts  amount  to  about  1240,000,000,  owned  by 
about  750,000  persons. 

To  these  causes  of  quick  adaptation  to  any  conditions  that 
may  arise,  or  to  any  necessity  for  the  application  of  new 
methods  or  devices,  may  be  added  the  custom,  which  has 
almost  the  force  of  law,  of  an  equal  distribution  of  estates 
among  the  children  of  the  testator.  Tools  to  him  who  can 
use  them  is  the  unwritten  law ;  and  neither  land  nor  capital 
can  remain  long  in  the  possession  of  him  who  cannot  direct 
or  use  them  wisely.  Liberty  to  distribute  is  esteemed  as 
important  a  factor  in  our  body-politic  as  liberty  to  accumu- 
late, even  though  the  liberty  may  sometimes  lead  to  the 
apparent  waste  of  great  fortunes. 

Finally,  it  must  be  held  that  our  freedom  from  the  blood- 
tax  of  a  standing  array,  and  the  fact  that  the  proceeds  of 
taxation  are,  on  the  whole,  usefully  and  productively  ex- 
pended, are  among  our  greatest  advantages;  and  this  is 
asserted  with  confidence,  notwithstanding  the  misgovern- 
ment  of  some  great  cities  and  of  several  of  the  Southern 
States.  What  are  these  failures  but  proofs  of  the  general 
confidence  of  the  people  in  local  self-government  ?  Great 
frauds  and  great  abuses  can  only  happen  where  integrity  is 
the  common  rule;  and  where  each  man  distrusts  his  neigh- 
bor, or  each  town,  city,  or  State,  distrusts  the  next,  the 
opportunity  for  fraud  or  breach  of  trust  cannot  occur.  Tlic 
use  of  inconvertible  paper  money  during  many  years  has  not 
been  without  its  necessary  malign  result  upon  the  character 
of  the  people,  and  the  newspapers  are  filled  with  the  fraud 


THE  COTTON  MANUFACTURES. 


423 


and  corruption  that  have  come  to  light;  but  no  newspaper 
has  ever  yet  recorded  one  fact  that  offsets  many  frauds.  In 
the  great  Boston  fire,  one  of  the  Boston  banks  lost  not  only 
every  book  of  account  but  «very  security  and  note  that  was 
in  its  vaults,  amounting  to  over  il,  250, 000.  On  the  morn- 
ing after  the  fire  its  officers  had  no  evidence  or  record  by 
which  any  of  the  persons  or  corporators  who  owed  it  money 
could  be  held  to  their  contracts;  yet  within  a  very  short 
time,  duplicate  notes  were  voluntarily  brought  in  by  its 
debtors,  many  of  whom  knew  not  whether  they  could  ever 
pay  them  because  the  fire  had  destroyed  their  own  property, 
and  the  known  ultimate  loss  of  that  bank  from  the  burning 
of  its  books  and  securities  was  less  than  #10,000. 

Our  army  is  but  a  border  police.  Although  its  officers  are 
held  in  honor  and  esteem,  military  life  is  not  a  career  that 
very  many  seek,  and  as  time  goes  on  it  will  become  an  occu- 
pation less  and  less  to  be  desired.  Thus  we  are  spared  not 
only  the  tax  for  its  support,  but  the  worse  tax  of  the  with- 
drawal of  its  members  from  useful  and  productive  pursuits. 
It  is  in  this  respect  that  we  claim  our  greatest  advantage 
over  the  nations  of  continental  Europe.  What  have  we  to 
fear  from  the  competition  of  Germany  if  we  really  undertake 
to  beat  her  in  the  neutral  markets,  which  we  can  reach  as 
readily  as  she  can  ?  For  a  little  while,  the  better  instruction 
of  the  merchants  in  her  technical  and  commercial  schools 
may  give  her  advantage;  but  that  can  be  overcome  in  a  single 
generation,  or  as  soon  as  the  need  is  felt  with  us,  as  it  is 
now  beginning  to  be  felt.  After  we  shall  have  supplied  our 
present  want  of  technical  education,  the  mere  difference  be- 
tween the  presence  of  a  great  army  on  her  soil  and  its  neces- 
sary support,  and  the  absence  of  such  a  tax  on  us,  will 
constitute  the  difference  on  which  modern  commerce  turns. 
When  traffic  of  the  world  turns  on  half  a  cent  a  yard,  a  cent 
a  bushel,  or  a  half-penny  a  pound  on  the  great  staples,  no 
nation  can  long  succeed  in  holding  a  traffic  that  is  handi- 
capped with  a  -standing  army.  The  protection  of  Germany 
from  our  competition  in  neutral  markets  may  be  offset  in 
our  yet  more  dangerous  competition  for  men.     The  German 


'  \\:<^' 


424 


ECONOMIC  HISTORY. 


m 


already  knows  Texas,  and  in  the  one  block  of  60,000  square 
miles  of  land  by  which  the  State  of  Texas  exceeds  the  area 
of  the  German  empire,  we  offer  room  and  healthy  conditions 
of  life  for  millions  of  immigrants ;  and  if  they  come  in  suffi- 
cient numbers,  they  can  raise  on  that  single  square  of  land 
as  much  cotton  as  is  now  raised  in  the  whole  South,  that  is 
to  say,  5,000,000  bales;  and  as  much  wheat  as  is  now  raised 
in  the  whole  North,  that  is  to  say,  400,000,000  bushels,  and 
yet  subsist  themselves  beside  on  what  is  left  of  this  little 
patch  that  will  not  be  needed  for  these  two  crops. 

It  will  be  obvious  that  even  the  least  imaginative  cannot 
but  be  moved  by  the  influences  that  have  been  designated, 
and  that  versatility  and  readiness  to  adopt  every  labor-saving 
device  will  not  only  be  promoted,  but  will  be  absolutely 
forced  into  action,  when  such  vast  areas  are  to  be  occupied, 
and  when  even  the  dullest  boy  is  educated  in  the  belief  that 
he  also  is  to  be  one  of  those  who  are  to  build  up  this  nation 
to  the  full  measure  of  its  high  calling.  We  may  not  dare 
to  boast,  in  view  of  all  we  have  passed  through ;  but  we  know 
that  slavery  has  been  destroyed,  and  that  the  nation  lives 
stronger,  truer,  and  more  vigorous  than  ever  before.  We 
know  that  it  has  been  reserved  for  a  democratic  republic  to 
be  the  first  among  nations  that,  having  issued  government 
notes  and  made  them  a  legal  tender,  has  resumed  payment 
in  coin  without  repudiation  or  reduction  of  the  promise. 
We  know  that  we  have  paid  nearly  a  half  of  our  great  na- 
tional debt  already,  and  that  the  rest  is  now  mainly  held  by 
our  own  citizens.  We  believe  that  within  the  lives  of  men 
of  middle  age  now  living,  the  nation  will  number  one  hun- 
dred millions,  and  that,  in  whatever  else  we  may  be  found 
wanting,  we  cannot  long  be  kept  back  in  our  career  of  mate- 
rial prosperity,  which  shall  be  shared  with  absolute  certainty 
by  every  one  who  brings  to  the  work  health,  integrity,  and 
energy. 

If  there  is  any  force  in  this  reasoning,  our  competition 
with  other  manufacturing  countries,  in  the  supplying  of  neu- 
tral markets  with  manufactured  goods,  will  not  be  compassed 
by  the  low  rates  of  wages  paid  to  our  factory  operatives  or  to 


THE  COTTON  MANUFACTURES. 


425 


60,000  square 

ceeds  the  area 

thy  conditions 

'  come  in  suffi- 

square  of  land 

South,  that  is 

s  is  now  raised 

)0  bushels,  and 

Et  of  this  little 

)  crops. 

ginative  cannot 

een  designated, 

Bry  labor-saving 

11  be  absolutely 

5  to  be  occupied, 

n  the  belief  that 

id  up  this  nation 

V^e  may  not  dare 

^h;  butweknov 

the  nation  lives 

rer  before.     Wc 

jratic  republic  to 

lued  government 

•esumed  payment 

of  the  promise, 

of  our  great  na- 

mainly  held  by 

the  lives  of  men 

lumber  one  bun- 

e  may  be  found 

r  career  of  mate- 

»8olute  certainty 

I,  integrity,  and 

lour  competition 

lupplying  of  neu- 

Tiot  be  compassed 

operatives  or  to 


the  working-people  engaged  in  our  metal  works  and  other 
occupations,  but  first  by  obtaining  and  keeping  such  an  ad- 
vanced position  in  the  application  and  use  of  improved  tools 
and  machinery  as  shall  make  high  wages  consistent  with  a 
low  cost  of  production ;  secondly,  by  our  ability  to  obtain  the 
raw  materials    at  low  cost.     Every  employer  knows  that 
among  employes  who  are  paid  by  the  piece,  it  is  the  opera- 
tive that  gains  the  largest  earnings  whose  production  costs 
the  least,  because  under  the  control  of  such  operatives  the 
machinery  is  most  effectively  guided  during  working  hours. 
As  it  is  with  single  operatives,  so  it  is  with  large  masses ;  if 
well  instructed  and  working  under  the  incentives  to  industry 
and  frugality  that  have  been  named,  their  large  product  will 
earn  for  them  ample  wages,  and  yet  result  in  a  low  cost  of 
labor  to  the  employer.     Such  workmen  never  have  any  "  blue 
Monday."    The  workman  who  in  this  country  habitually  be- 
comes intoxicated  is  soon  discharged,  and  his  place  is  filled 
by  one  who  respects  himself  and  values  his  place  too  much 
to  risk  his  position  in  dissipation. 

Competition  with  England  in  supplying  the  markets  of 
Asia,  Africa,  and  South  America  with  cotton  goods,  is  now 
perhaps  the  best  criterion  by  which  to  gauge  our  ability  to 
compete  in  other  branches  of  manufacture.  It  has  been 
often  assumed  in  England  that  the  increasing  shipments  of 
cotton  goods  from  this  country  have  been  forced  by  necessity, 
and  merely  consisted  of  lots  sold  below  cost,  as  a  means  of 
obtaining  ready  money ;  but  there  is  no  ground  whatever  for 
this  general  assumption,  even  though  some  small  shipments 
may  have  been  made  at  first  with  this  view.  Our  export  of 
cotton  fabrics  amounts  as  yet  to  but  7  or  8  per  cent  of  our 
production,  and  is  but  a  trifle  compared  to  that  of  Great 
Britain;  but  it  is  not  made  at  a  loss,  and  it  constitutes  a 
most  important  element  in  the  returning  prosperity  of  our 
cotton-mills.  The  goods  exported  are  mostly  made  by  strong 
and  prosperous  corporations,  paying  regular  dividends,  and 
consist  mainly  of  coarse  sheetings  and  drills,  which  are  sold 
by  the  manufacturers  to  merchants,  who  send  them  to  China, 
Africa,  and  South  America  in  payment  for  tea,  silk,  ivory, 


"rh  Pt  i*i7 


i.I' 


426 


ECONOMIC  HISTORY. 


sugar,  gums,  hides,  and  wool.     They  are  not  made  by  oper- 
atives who  earn  less  than  the  recent  or  present  rates  of  wages 
in  England,  but  in  most  departments  of  the  mills  by  those 
who  earn  equal  wages,  or  even  more.     This  competition  had 
been  fairly  begun  before  the  late  war  in  this  country,  but  it  is 
now  continued  under  better  conditions.     The  mills  of  New 
England,  owing  to  through  connections  by  rail,  are  now 
relatively  much  nearer  the  cotton-fields  than  they  were  then. 
Prior  to  1860  substantially  all  the  cotton  went  to  the  sea- 
ports of  the  cotton  States,  and  from  there  the  cost  of  moving 
it  to  the  North  or  to  Liverpool  varied  but  little ;  but  at  the 
present  day  a  large  and  annually  increasing  portion  of  tiie 
cotton  used  in  the  North  is  bought  in  the  interior  markets, 
and  is  carried  in  covered  cars  directly  to  the  mills,  where 
the  bales  are  delivered  clean,   and  much  more  free  from 
damage  and  waste  than  those  which  are  carried  down  tiie 
Southern  rivers  on  boats  and  barges    dumped   upon  the 
wharves,  and  then  compressed  to  the  utmost  for  shipment 
by  sea. 

In  proof  that  this  advantage  is  an  actual  one,  the  following 
example  may  be  cited :  A  contract  has  just  been  made  for  the 
transportation  of  a  large  quantity  of  cotton  from  Texas  to 
Liverpool  at  the  rate  of  $1.10  per  100  pounds,  the  proportion 
assigned  to  the  land  carriage  being  70  cents,  to  transship- 
ment in  Boston  and  to  the  steamship  40  cents ;  the  rate  of 
marine  insurance  is  three  eighths  of  1  per  cent,  and  the  cost 
of  handling  in  Liverpool  and  transportation  to  Manchester, 
not  less  than  a  quarter  of  a  cent  per  pound.  Bargains  maj 
be  made  to  bring  cotton  from  the  same  point  in  Texas  to  the 
principal  factory  cities  of  New  England  at  the  rate  assigned 
to  the  land  carriage,  namely,  70  cents  per  100  pounds.  This 
cotton  is  brought  from  the  interior  towns  of  Texas  to  Boston 
and  cannot  l>e  carried  to  Liverpool  by  way  of  Galveston  or  j 
New  Orleans  so  cheaply,  else  it  would  not  come  this  waj, 
Assuming  the  bale  to  weigh  500  pounds,  at  10  cents  a  pound, 
we  have  the  following  comparative  cost:  — 


THE  COTTON  MANUFACTURES. 


427 


LOWELL. 

Ptr  Bait.       Pw  Owt 

Cost  of  cotton  in  Texas,  600  pounds,  at  10 
cents,  including  all  local  charges  .    .    .    950  00 

Freight  to  Lowell  in  a  covered  looked  car  in 
which  the  cotton  is  protected  from  rain, 
mud,  and  other  causes  of  waste,  at  70 
cents  per  100  pounds 3  50 

Total 953  50     910  70 

LANCASHIRE. 

500  pounds,  at  10  cents,  including  all  local 
charges 950  00 

Freight  from  Texas  to  Liverpool,  at  91-10 
per  100  pounds 5  50 

Insurance  at  three  eighths  of  one  per  cent  on 

m 21 

Transshipment  in  Liverpool,  and  freight  to 
Lancashire,  one  fourth  of  a  cent    ...        1  25 

Total 956  96       11  39 

Advantage  of  Lowell  over  Lancashire    .    .      93  46       90  69 

There  may  be  changes  in  the  rates,  but  it  does  not  seem 
probable  that  the  relation  of  the  land  to  the  ocean  rate  can 
be  much  changed,  and  it  would  therefore  appear  that  the 
Xew  England  manufacturer  will  have  a  permanent  advantage 
in  the  price  of  American  cotton  of  any  given  grade,  varying 
from  6  to  8  per  cent  as  the  price  of  cotton  may  vary  from 
12  to  9  cents  per  pound ;  and  this  advantage  may  be  equal  to 
15  or  25  per  cent  in  ability  to  pay  wages,  as  the  cost  of  labor 
varies  from  a  quarter  to  a  third  in  the  total  cost  of  coarse 
and  medium  goods,  such  as  constitute  the  chief  part  of  the 
demand  of  the  world. 

It  may  be  said  that  this  proves  too  much,  and  that  the 
cotton  spinners  of  the  Southern  States  will  have  the  same 
relative  advantage  over  New  England.  Let  this  be  freely 
admitted.  We  are  treating  the  question  of  the  future 
supremacy  of  the  United  States  in  the  manufacture  as  well 
as  in  the  growth  of  cotton,  and  if  the  future  changes  in 


i- 


428 


ECONOMIC  HISTORY, 


1(1  i 


population,  wealth,  and  condition  of  the  different  scctionB  of 
this  country  shall,  in  the  future,  cause  the  increase  of  spin- 
dles especially  in  coarse  fabrics,  to  be  planted  in  the  healthy 
hill  country  of  northern  Georgia,  eastern  Tennessee,  and  the 
Garolinas,  it  will  simply  be  the  greater  evidence  that  natural 
laws  are  paramount.  If  Georgia  has  twice  the  advantage 
over  Lancashire  that  New  England  now  possesses  it  will 
only  be  the  fault  of  the  people  of  Georgia  if  they  do  not 
reap  the  benefit  of  it. 

It  has  been  stated  that  our  present  rates  of  wages  in  our 
cotton  factories  are  higher  than  they  were  in  1860,  and  with 
our  increasing  prosperity  they  will  tend  to  advance ;  but  at 
the  same  time  the  cost  of  the  labor  in  the  finished  fabric  hi 
been  reduced  hy  the  greater  productive  power  of  the  macJiinery. 
The  fabrics  upon  which  by  far  the  largest  part  of  the  spin- 
dles and  looms  of  the  country  are  operated  may  be  divided 
substantially  into  the  following  classes:  — 

1.  The  printing-cloth,  28  inches  wide  and  7  yards  to  tlie  pound, 
The  cost  of  mill  labor  in  making  this  fabric,  including  the  salaries, 
wages,  or  earnings  of  every  one  employed,  is  now  lesti  than  one 
cent,  or  a  half-penny,  a  yard. 

2.  The  heavy  sheeting,  36  inches  wide  and  the  heavy  drill,  30 
inches  wide,  each  weighing  from  2|  to  3  yards  to  the  jjound.  The 
cost  of  mill  labor  in  making  these  fabrics  is  about  1^  cents  per 
yard. 

3.  Shirtings  and  sheetings,  30  to  36  inches  wide,  Nos.  20  to  30 
yarns,  each  weighing  from  3  to  4  yards  to  the  pound.  Tlie  cost  of 
mill  labor  in  these  goods  is  from  1^  to  2  cents  per  yard. 

4.  The  fine  sheeting  or  shirting,  from  30  to  40  inches  wide. 
Nos.  30  to  40  yarns,  weighing  from  3  to  4  yards  to  the  pound. 
The  cost  of  mill  labor  in  these  goods  is  from  1 J  to  3  cents  per 
yard. 

6.  Fabrics  of  a  similar  kind  to  the  above,  from  1  to  3  yards 
wide. 

6.  Heavy  cotton  duck,  cotton  grain-bags,  cotton  hose,  and  other  j 
special  articles. 

7.  Blue  denims,  stripes,  tickings,  brown  denims  and  duck,  and 
other  heavy  colored  goods,  substantial  ginghams,  cottonades,  and  j 
other  fancy  woven  fabrics  of  medium  or  heavy  weight. 


THE  COTTON  MANUFACTURES. 


429 


These  seven  classes  comprise  more  than  95  per  cent  of  our 
cotton  fabrics  in  weight;  to  them  arc  to  be  added  lawns, 
woven  fabric  of  light  weight  for  dresses,  and  spool-cotton. 

In  respect  of  one  half  of  these  fabrics,  being  those  of  the 
heavier  grade,  our  proximity  to  the  cotton-field,  computed  at 
not  less  than  half  a  cent  per  pound,  oftener  three  quarters 
will  enable  the  New  England  manufacturer  to  pay  from  15  to 
20  per  cent  higher  wages  and  yet  to  make  the  goods,  other 
things  being  equal,  at  the  same  cost  as  his  competitor  in 
Lancaslnrc.  On  a  large  portion  of  the  other  kinds  this  ad- 
vantage In  the  cost  of  cotton  would  be  from  10  to  15  per 
cent. 

The  natural  advantages  cannot  work  immediate  results; 
the  ways  and  means  of  a  great  commerce  cannot  be  impro- 
vised In  a  year,  hardly  in  a  generation.  Much  depends  on 
the  wisdom  of  our  legislators  in  framing  the  acts  under 
which  our  taxes  are  collected,  whether  customs  or  excise, 
and  yet  more  upon  our  adherence  to  a  specie  basis  in  our 
currency ;  but  in  the  long  run  the  only  reason  why  we  shall 
not  assume  a  constantly  increasing  share  in  the  cotton  manu- 
facture of  the  world  will  be  the  free  choice  that  our  country 
offers  for  other  occupations  of  a  more  profitable  or  more 
desirable  kind. 

Reference  has  been  made  to  the  small  proportion  of  fine 
spinning  In  the  United  States.  Within  the  last  few  years 
great  progress  has  been  made  in  spinning  and  weaving 
fabrics  of  Nos.  60  to  100,  such  as  lawns  and  fine  dress  goods, 
and  also  In  spinning  fine  yarn  for  spool-cotton.  In  the  latter 
direction  yarns  as  fine  as  No.  120  are  now  spun  on  the  ring 
spinning-frame,  a  machine  invented  in  this  country  and 
more  used  than  any  other  for  warp  spinning,  and  now  being 
adopted  in  Europe.  Yarns  as  fine  as  550  arc  spun  on  mules 
for  three-cord  sewing-cotton,  and  for  experiment  much  finer 
counts  have  been  reached.  It  has  often  been  alleged  that 
fine  yarns  could  not  be  as  well  spun  in  the  United  States  as 
iu  England,  owing  to  the  dry  and  electrical  conditions  of  the 
atmosphere  during  a  considerable  part  of  the  year.  This 
difficulty  has  existed  in  some  degree,  although  not  so  as  to 


w^ 


''will 


480 


ECONOMIC  HISTORY. 


preclude  fine  work  if  it  had  been  profitable  to  undertake  it; 
but  as  far  as  this  difficulty  existed  it  has  lately  been  entirely 
removed  by  the  invention  of  a  very  simple  and  inc.x pensive 
apparatus  for  moistening  the  air  with  the  fmcst  spray  of  pure 
cold  water,  by  which  method  the  air  of  a  spinning  or  wear- 
ing-room may  be  kept  at  any  desired  degree  of  humidity  in 
the  driest  day,  so  that  the  adverse  effect  of  electricity  is 
entirely  overcome. 

Whenever  the  condition  and  extension  of  our  market  will 
warrant  the  undertaking,  there  is  now  no  obstacle  to  our 
manufacturing  any  variety  of  cotton  fabric  that  ia  in  de- 
mand, either  coarse  or  fine. 

While  it  may  not  be  worth  while  to  give  historical  statistics 
in  relation  to  the  cotton  manufacture  of  this  country  in  tlie 
present  report,  a  few  words  may  well  be  devoted  to  changes 
in  the  work,  which  have  conduced  not  only  to  the  welfare  of 
the  people,  but  to  the  welfare  of  the  operatives  also. 

When  the  cotton  manufacture  was  first  established  in  the 
United  States  water-power  was  considered  essential  to  the 
work,  and,  as  a  rule,  the  location  of  mills  was  limited  to 
narrow  valleys,  or  places  where  there  was  room  only  for 
mills  of  several  stories  in  height.  The  first  mills  built  were 
very  considerable  structures  for  their  time,  but  they  were 
low-studded,  badly  lighted,  and  were  heated  by  stoves ;  and 
in  these  mills  the  operatives  were  compelled  to  work  under 
arduous  conditions  (owing  to  the  imperfection  of  the  machin- 
ery) thirteen  to  fourteen  hours  a  day.  These  narrow  struc- 
tures were  in  some  places  built  seven  stories  in  height.  All 
the  plans  were  made  with  reference  to  this  form  of  structure. 
whether  the  mill  was  to  be  operated  by  water-power  or  bv 
steam,  until  quite  a  recent  period.  In  1860  the  "normal" 
cotton-mill  (so  to  speak)  had  become  a  factory  four  or  fiv 
stories  high,  about  60  feet  wide,  varying  in  length  according 
to  the  amount  of  machinery,  high-studded,  well  lighted, 
thoroughly  well  ventilated,  and  heated  by  radiation  from 
steam-pipes. 

In  1866  the  machine  for  sizing  yarn,   known  as  the 
"  slasher  "  was  first  imported,  displacing  the  machine 


I  Hi, 


THE  COTTON  MANUFACTURES. 


481 


ne,  but  they  vrere 


Ihe  machine  know 


as  the  "dresser."  In  the  use  of  the  slasher  ono  man  and  a 
|)oy  working  in  a  thoroughly  well- ventilated  room,  at  a 
moderate  degree  of  heat,  took  the  place  of  seven  or  eight 
men  who  had  been  previously  employed  in  the  same  work  in 
a  room  which  was  of  necessity  kept  at  over  100"  F.,  the  at- 
mosphere saturated  with  sour  starch.  This  change  removed 
the  only  really  objectionable  kind  of  work  from  the  cotton 
factory.  In  the  earlier  mills  the  apparatus  for  the  removal 
of  dust  from  the  factory  was  very  imperfect,  but  to-day  every 
room  even  including  those  in  which  the  cotton  is  opened,  is 
substantially  free  from  dust;  and  it  happens  that  the  degree 
of  heat  and  of  humidity  required  for  the  best  work  of  the 
cotton  factory  is  one  which  conduces  in  great  measure  to  the 
health  of  the  operative,  perhaps  a  little  warmer  than  may  be 
desirable. 

At  the  present  time  another  change  is  in  progress.  The 
use  of  water-power  is  becoming  less,  its  development  for  the 
purpose  of  sale  having  never  proved  profitable.  The  power 
thus  developed  has  been  a  valuable  auxiliary  in  the  working 
of  the  factory,  but  as  a  matter  of  investment  the  development 
of  land  and  water-power  together  have  almost  without  ex- 
ception failed  to  be  profitable. 

The  great  progress  in  the  construction  of  the  steam-engine 
and  in  the  economy  of  fuel  is  steadily  working  towards  a 
change  to  steam  as  the  principal  motive-power  for  the  cotton 
factory.  An  incidental  advantage  in  this  change  is  that  the 
factory  may  be  placed  nearer  to  the  principal  markets,  where 
it  can  be  more  conveniently  supervised  and  more  easily 
reached.  The  nso  of  steam  also  renders  a  choice  of  location 
W^'  ;  and  the  model  factory,  one  or  two  stories 

'  laced  upon  a  level  plain,  and  can  be  more 

lite  id  ventilated  and  more  economically  operated 
than  a  an  V  other  form  of  building  is  used.  Under  these 
new  conditions,  better  dwellings  for  the  operatives,  less 
cro  led,  can  also  be  provided,  and  in  every  respect  the  work 
can  be  conducted  under  l    'ter  conditions. 

At  the  present  time  '  hours  of  labor  in  New  England, 
where  most  of  the  co      .  manufacturing  is  done,  vary  from 


1 1  ■'■ 


432 


ECONOMIC  HISTORY. 


If  ■; 


ten  to  eleven  hours  per  day.  This  great  change  has  boon 
brought  about  by  a  gradual  comprehension  of  the  best  con- 
ditions both  for  the  laborer  and  for  the  capitalist,  and  witii. 
out  much  regard  to  legislation.  It  is  probable  that  ere  lon<» 
ten  hours  will  be  the  limit  of  factory  work  throughout  New 
England,  either  by  process  of  legislation  or  through  the 
conviction  on  the  part  of  employers  that  any  longer  hours 
are  not  profitable,  —  a  conclusion  to  which  many  have  al- 
ready come. 

A  great  change  has  also  in  the  progress  of  time  been 
effected  in  the  dwellings  in  which  the  factory  operatives 
live,  in  part  tending  towards  better  conditions,  in  part  to 
worse  conditions.  On  the  whole  there  has  been  less  average 
progress  in  this  di}-3ction  than  in  the  construction  and  opera- 
tion of  the  mills  thtiiiselves.  The  choice  of  position,  liow- 
ever,  which  is  now  given  by  the  greater  use  of  steam,  gives 
better  opportunities  for  scattering  the  dwelling-houses  over 
a  wider  area  at  little  cost. 

A  more  abundant  supply  and  choice  of  food  has  been 
effected  in  this  as  in  all  other  branches  of  work,  to  the  great 
benefit  of  the  operatives,  by  the  consolidation  and  more 
effective  service  of  railroads.  The  average  work  of  a  male 
operative  over  sixteen  years  of  age  in  a  textile  factory  will 
earn  enough  in  a  day  to  pay  for  the  transportation  of  meat 
and  bread  for  one  year,  one  thousand  miles,  or  from  Chi- 
cago to  Lowell,  Lrwrence,  or  Fall  River.  So  far  as  cost  is 
concerned,  the  great  fields  of  the  West  and  the  factories  of 
the  East  are  in  closer  proximity  than  if  the  factory  depended 
for  its  food  upon  its  own  immediate  neighborhood,  when 
served  only  by  wagon-roads.  The  same  changes  which  have 
so  greatly  reduced  the  railway  charges  between  East  and 
West  are  now  taking  place  between  North  and  South.  The 
charge  for  moving  cotton  is  becoming  less  year  by  year,  and 
it  will  soon  matter  little  where  the  cotton  factory  is  placed, 
so  far  as  distance  between  the  field  and  the  factory  is  con- 
cerned. The  choice  may  be  made  so  as  to  secure  tlie  stimu- 
lus of  a  moderately  cold  climate,  in  which  in-door  labor  is 
more  to  be  desired  than  out-door,  in  which  the  humidity  of 


THE  COTTON  MANUFACTURES. 


433 


iS  of  time  been 
,ctory  operatives 
ions,  in  part  to 
been  less  average 
notion  and  opera- 
of  position,  how- 
jc  of  steam,  gives 
jlUng-housca  over 

of  food  has  been 
work,  to  the  great 
Idation  and  more 
;e  work  of  a  male 
ixtile  factory  will 
iportation  of  meat 
les,  or  from  Chi- 
So  far  as  cost  is 
A  the  factories  of 
factory  depended 
ghborhood,  v:hen 
janges  which  have 
fctween  East  and 
and  South.    Tlie 
[year  by  year,  and 
factory  is  placed, 
Ihe  factory  is  con- 
Isecure  the  stimu- 
in-door  laboi  is 
h  the  humidity  oi 


the  atmosphere  is  measurably  uniform  or  is  not  subject  to 
extremes,  and  where  facilities  for  repairs  on  machinery  are 
close  at  hand,  and  the  population  is  sufficiently  dense  to 
assure  an  adequate  and  constant  supply  of  operatives, — mills 
which  are  much  isolated  always  working  at  a  disadvantage. 

Great  changes  of  a  beneficial  kind  can  now  be  foreseen  in 
the  application  of  electricity  to  the  lighting  of  the  factory. 
The  developments  in  this  direction  are  also  such,  that,  what- 
ever the  relative  cost  of  the  electric  light  as  compai'cd  to  gas 
may  be,  it  is  yet  so  beneficial  in  other  respects,  that  no  fac- 
tory manager  can  well  afford  to  dispense  with  it,  not  only 
because  of  the  more  perfect  work  which  its  use  assures,  but 
because  the  choice  of  the  operative  in  selecting  the  place  in 
which  to  work  will  render  the  use  of  the  electric  light  almost 
a  matter  of  necessity. 

In  conclusion,  it  may  be  said  that  the  progress  in  the  art 
of  manufacturing  cotton  fabrics  in  the  last  forty  years  has 
been  very  great,  distinctly  sustaining  the  rule  which  affects 
all  the  arts  to  which  modern  machinery  can  be  applied, 
namely,  that,  in  proportion  to  the  effectiveness  of  capital  in 
the  form  of  machinery  and  the  freedom  with  which  it  may 
be  applied,  the  cost  of  production  is  lessoned  and  the  con- 
sumer is  served  more  cheaply ;  while,  on  the  other  hand,  the 
wages  of  the  operatives  are  increased,  the  conditions  of  work 
made  better,  and  the  identity  of  interests  between  labor  and 
capital  are  established. 

It  may  be  said  that  in  the  absence  of  any  artificial  obstruc- 
tions to  traffic  between  States  or  nations,  the  truest  guide  to 
the  place  where  the  lo^rest  cost  of  production  is  compassed 
may  be  found  by  ascertaining  where  the  wages  of  labor  are 
the  highest,  and  the  conditions  of  life  the  best ;  that  at  that 
point  the  lowest  cost  of  production  must  be  found  for  this 
reason :  both  wages  and  profits  are  derived  from  the  sale  of 
the  thing  produced ;  hence  it  follows  that  where  the  natural 
conditions  of  production  are  best,  the  machinery  most  ef- 
fective, and  the  labor  the  most  intelligent  and  skilful,  the 
product  will  be  largest  at  the  least  effort  to  those  who  do  the 
^^oik,  and  when  the  division  of  this  product  is  made  under 

28 


i  ••  : 


484 


ECONOMIC  HISTORY. 


the  conditions  of  absolutely  free  competition,   the  relative 
proportion  which  capital  can  secure  to  itself  will  be  least 
even  though  its  absolute  share  be  greater  and  greater  as  the 
years  go  on;  but  the  share  which  the  laborer  will  receive 
will  increase  year  by  year,  both  absolutely  and  relatively. 
As  capital  increases  the  absolute  sum  of  profits  is  greater, 
but  the  relative  share  of  the  product  secured  by  capital  be- 
comes less.     The  increase  of  capital  and  its  effective  use  by 
skilled  laborers  assure  a  larger  production,  and  the  workman 
obtains  a  larger  share  of  a  larger  product,  measured  in  kind 
or  in  wages  paid  in  money.     In  the  cotton-mill,  as  well  as 
in  many  other  arts,  special  skill  is  required,  but  perhaps 
less  general  intelligence ;  therefore  a  lower  grade  of  opera- 
tives may  be  employed  from  time  to  time  as  the  machinery 
becomes  more  automatic,  but  at  a  steadily  increasing  rate  of 
wages.     Invention  may,  therefore,  be  said  to  enable  all  con- 
ditions of  men  to  attain  a  higher  plane  of  material  welfare, 
and  as  one  class  passes  from  the  factory  to  other  occupations 
which  offer  better  conditions  of  life,  new  improvements  ena- 
ble those  who  could  not  do  the  factory  work  before,  to  under- 
take and  carry  it  on.     Thus  it  has  been  in  the  past,  since 
the  farmers'  daughters  of  New  England  left  the  factory,  iu 
which,  with  much  longer  hours  of  work,  they  earned  only 
about  one  half  the  wages  now  paid ;  but  those  who  have  suc- 
ceeded them  could  not  then  have  been  capable  of  doing  the 
work  at  all  which  they  now  so  easily  accomplish. 


f 


THE  IRON  AND  STEEL  INDUSTRIES. 


435 


n,   the  relative 


THE  IRON  AND  STEEL  INDUSTRIES. 

From  Swank's  Statistics  op  the  Iron  and  Steel  Production, 
Tenth  Census,  Vol.  II.  pp.  886-890. 


Important  Uses  of  Iron  and  Steel. 

The  people  of  the  United  States  are  the  largest  per  capita 
consumers  of  iron  and  steel  in  the  world,  and  of  all  nations 
they  are  also  the  largest  aggregate  consumers  of  these  pro- 
ducts. Great  Britain  makes  more  iron  than  we  do,  but  she 
exports  about  one  half  of  all  that  she  makes.  She  exports 
more  than  one  half  of  the  steel  that  she  makes,  and  yet  makes 
but  little  more  than  this  country.  No  other  European  coun- 
try equals  Great  Britain  either  in  the  per  capita  or  aggregate 
consumption  of  iron  and  steel.  This  country  is  not  now 
producing  as  much  iron  and  steel  as  it  consumes,  but  imports 
large  quantities  of  both  products,  Great  Britain  being  the 
principal  source  of  our  foreign  supply.  Our  exports  of  iron 
and  steel  are  only  nominal. 

A  simple  enumeration  of  some  of  the  more  important  uses 
to  which  iron  and  steel  are  applied  by  our  people  will  show 
how  prominent  is  the  part  these  metals  play  in  the  develop- 
ment of  American  civilization  and  in  the  advancement  of 
our  greatness  and  power  as  a  nation. 

We  have  built  almost  as  many  miles  of  railroad  as  the 
^\'hole  of  Europe,  and  consequently  have  used  in  their  con- 
struction almost  as  many  rails,  and  now  use  almost  as 
many  railroad  cars  and  locomotives.  At  the  close  of  1881 
this  country  had  100,000  miles  of  railroad,  Europe  had 
about  106,000  miles,  and  all  the  rest  of  the  world  had  about 
45,000  miles.  The  United  States  had  nineteen  miles  of 
railroad  to  every  10,000  of  population,  while  Europe  had  a 
little  more  than  three  miles  to  the  same  population.  Rail- 
roads, it  is  well  known,  annually  consume  more  than  one 
lialf  of  the  world's  production  of  iron  and  steel,  —  rails, 


i' 


1  f.i  i  i-' 


III'. 


t- '" 


436 


ECONOMIC  HISTORY. 


bridges,    cars,    and  locomotives    being    impossible  without 
these  metals.     The  street  railway  is  an  American  invention 
which  also  consumes  large  quantities  of  iron  and  steel,  and 
we  are  far  in  advance  of  every  other  nation  in  its  use.    We 
were  also  the  first  nation  in  the  world  to  introduce  elcvatetl 
railways  especially  to  facilitate  travel  in  large  cities.     In  the 
construction  of  our  New  York  elevated  railways  beauty  of 
design,  fitness  of  parts,  and  strength  of  materials  have  been 
so  perfectly  combined  as  to  excite  the  admiration  of  all  who 
behold  them.     We  are  the  foremost  of  all  nations  in  the  use 
of  iron  and  steel  in  bridge-building  for  railroads  and  ordinary 
highways,  and  the  lightness  and  gracefulness  of  our  l)riflge8 
are  nowhere  equalled,  while  their  strength  and  adaptability 
to  the  uses  to  which  they  are  required  are  nowhere  surpassed. 
In  the  use  of  iron  for  water-pipes  and  gas-pipes  we  are  prob- 
ably in  advance  of  every  other  nation.     We  make  more  iron 
stoves  for  heating  halls  and  dwellings  and  for  the  i)uii)(»ses 
of  the  kitchen  than  all  the  rest  of  the  world,  and  in  the  use 
of  heaters  and  ranges  we  are  behind  no  other  nation.    Our 
household  stoves,  both  for  heating  and  cooking,  arc  works  (if 
real  art  as  well  as  of  utility.     They  are  ornamiMits  of  Ameri- 
can homes,  instead  of  being  conveniences  simply.     Our  heat- 
ing stoves  are  especially  handsome,  bright,  cheerful,  hoalth- 
ful,  and. clean.    In  all  respects  they  form  the  best  combination 
of  desirable  qualities  yet  devised  for  the  heating  of  private 
dwellings.    Cooking  and  other  domestic  utensils  of  iron  have 
always,  even  in  colonial  days,  been  freely  used  in  American 
households.     We  make  liberal  use  both  of  cast  and  wrought 
iron  in  the  construction  of  public  and  private  buildings.    Our 
use  of  iron  for  these  purposes  has  in  late  years  been  quite 
marked,  and  in  no  respect  more  so  thf^n  in  the  truly  artistic 
effects  which  we  give  to  this  metal.     \''e  probably  excel  all 
nations  in  the  use  of  iron  for  ornamental  purposes  in  connec- 
tion with  masonry,  brick-work, and  wood-work.     Fine  illustra- 
tions of  the  artistic  combination  of  iron  with  other  materials 
may  be  seen  in  the  interior  of  the  new  State  Department 
building  at  Washington  and  in  the  interior  of  the  new  passen- 
ger depot  of  the  Pennsylvania  railroad  at  Philadelphia,    ^e 


THE  IRON  AND  STEEL  INDUSTRIES. 


437 


lossible  without 
erican  invention 
n  and  steel,  and 
in  its  use.    We 
troduce  elevated 
re  cities.     In  the 
ilways  beauty  of 
crials  have  been 
ration  of  all  who 
lations  in  the  use 
jads  and  ordinary 
>88  of  our  bridges 
.  and  adai)tability 
owhere  surpassed. 
)ipes  we  are  prob- 
e  make  more  iron 
I  for  the  purposes 
rid,  and  in  the  use 
)ther  nation.    Our 
)king,  arc  works  of 
namtMits  of  Anieii- 
limply.     Onrheat- 
t,  cheerful,  hoaltb- 
le  best  combination 
heating  of  private 
;cnsils  of  iron  have 
used  in  American 
cast  and  wrought 
tte  buildings.    Our 
years  been  quit*? 
the  truly  artistic 
probably  excel  all 
.urposes  in  connec- 
*rk.    Fine  illustw- 
[ith  other  materials 
State  Pepartmeut 
ofthenewpasson- 
Philadelphia,   ^^e 


lead  the  world  in  the  use  of  iron  and  steel  wire  for  fencing 
purposes,  and  we  have  more  miles  of  telegraph  wire  in  use 
than  any  other  country.     Barbed-wire  fencing  is  an  Ameri- 
can invention.     We  have  made  creditable  progress  in  the  con- 
struction of  iron  ships,  and  we  would  have  made  much  greater 
progress  if  the  same  encouragement  that  has  been  given  by 
other  nations  to  their  shipping  interests  had  been  given  to 
ours.    We  use  immense  quantities  of  plate-iron  in  the  stor- 
age, transportation,  and  refining  of  petroleum,  in  tlie  produc- 
tion of  which  nature  has  given  us  almost  a  monopoly.     The 
oil-wells  themselves  yearly  require  thousands  of  tons  of  iron 
pipes  for  tubing.    We  make  liberal  use  of  plate  and  sheet  iron 
in  the  construction  of  the  chimneys  of  steamboats  on  our  lakes 
and  rivers,  and  in  the  construction  of  factory,  rolling-mill, 
and  blast-furnace  chimneys,  and  the  stacks  of  blast-furnaces. 
American  planished  sheet-iron  has  almost  entirely  super- 
seded Russia  sheet-iron  in  our  markets.     We  use  it  for  loco- 
motive jackets,  in  the  manufacture  of  stoves  and  stove-pipe, 
and  for  many  other  purposes.     We  are  the  largest  consumers 
of  tin  plates  in  the  world,  —  Great  Britain,  their  principal 
manufacturer,  sending  us  annually  more  than  one  half  of  her 
v,holc  product.     Portable   and  stationary  engines   consume 
large  quantities  of  iron  and  steel.     Our  beautiful  steam  fire- 
engines  are  the  product  of  American  taste  and  skill,  if  they 
are  not  strictly  an  American   invention,  and  we  annually 
make  large  numbers  of  them  for  home  use  and  for  exporta- 
tion.    Anchors  and  chains,  cotton-presses   and  cotton-ties, 
sugar-pans  and  salt-pans,  and  general  foundry  and  machine 
work  annually  require  large  quantities  of  cither  iron  or  steel. 
We  make  our  own  cotton  and  woollen  manufacturing  machin- 
ery, and  nearly  all  the  other  machinery  that  we  use.     The 
manufacture  of  the  printing-presses  of  the  country  consumes 
immense  quantities  of  iron  and  steel.     No   other  country 
makes  such  free  use  of  the   printing-press  as  this  country. 
We  are  the  leading  agricultural  nation  of  the  world,  and 
hence  are  the  largest  consumers  of  agricultural  implements; 
hut  wo  are  also  in  advance  of  every  other  nation  in  the  use 
of  agricultural  machinery.     Our  use  of  iron  and  steel  in 


m 


111.:-;' 

1 1.Ji'' 


438 


ECONOMIC  HISTORY. 


IS''' 


l)'l , . 


agriculture  takes  rank  next  to  their  use  in  the  construction 
and  maintenance  of  railroads.  We  lead  all  nations  in  the 
manufacture  of  cut-nails  and  spikes.  Having  a  larger  and 
more  rapidly  increasing  population  than  any  other  country 
that  is  noted  for  its  consumption  of  iron,  we  are  consequently 
the  largest  consumers  of  nails  and  spikes  in  the  construction 
of  dwellings  and  public  buildings,  stores,  warehouses,  offices 
and  similar  structures.     Our  extended  and  varied  minin<' 

O 

operations  consume  iron  and  steel  in  large  quantities.  So 
do  our  manufactures  of  scales  and  balances,  letter-presses, 
burglar-proof  and  fire-proof  safes,  sewing-ipachines,  and 
wagons  and  carriages.  Sewing-machines  are  an  American 
invention.  Considerable  quantities  of  iron  or  iron  and 
steel  are  used  for  sewer  and  other  gratings,  street-crossings, 
iron  pavements,  lamp-posts,  posts  for  awnings,  all  sorts  of 
small  hardware,  horseshoes  and  horseshoe  nails,  wire-rope, 
iron  hoops,  iron  cots  and  bedsteads,  woven-wire  mattresses, 
iron  screens,  iron  railings,  and  fire-arms.  In  the  manufac- 
ture of  machine  and  hand  tools  and  general  cutlery  we  arc 
excelled  by  no  other  nation,  and  in  the  use  of  machine  tools 
we  are  in  advance  of  every  other  nation.  In  general  cutlery 
oui  saws  and  axes  especially  enjoy  a  world-wide  reputation. 
Not  the  least  important  use  to  which  iron  and  steel  are  put 
in  this  coimtry  is  in  the  extension  of  the  iron  industry  itself, 
—  every  blast-furnace,  rolling-mill,  or  steel  works  that  is 
erected  first  devouring  large  quantities  of  these  products 
before  contributing  to  their  general  supply. 

In  the  substitution  of  steel  for  iron  this  country  is  rajjidly 
progressing,  especially  in  the  construction  and  equipment  of 
its  railroads.  During  the  past  few  years  fully  two  thirds  of 
all  the  rails  that  have  been  laid  on  American  railroads  have 
been  made  of  Bessemer  steel,  and  at  present  a  still  larger 
proportion  of  steel  rails  is  required  by  our  railroad  com- 
panies. On  several  American  railroads  the  boilers  of  all 
new  locomotives  are  now  required  to  be  made  of  steel,  and 
the  tendency  is  toward  the  exclusive  use  of  steel  for  locomo- 
tive boilers,  and  its  genei-al  use  for  stationary  and  marine 
boilers.     The  tires  of  American  locomotives  are  now  made 


THE  IRON  AND  STEEL  INDUSTHIES. 


439 


le  construction 

nations  in  the 
g  a  larger  and 
(  other  country 
.re  consequently 
;he  construction 
rehouses,  offices 
i  varied  mining 

quantities.  So 
3,  letter-presses, 
T-ipachines,  and 
,re  an  American 
•on  or   iron  and 

street-crossings, 

ings,  all  sorts  of 

nails,  wire-rope, 

-wire  mattresses, 

In  the  manufac- 
ral  cutlery  we  are 

of  machine  tools 
11  general  cutlery 

■wide  reputation. 

and  steel  are  put 
on  industry  itself, 
leel  works  that  is 

,£  these  products 


exclusively  of  stetl,  and  the  fire-boxes  of  our  locomotives  are 
crenerally  made  of  steel.  The  steel  used  in  the  construction 
of  American  locomotives  is  now  chiefly  produced  by  the  open- 
hearth  process.  We  have  built  a  few  steel  bridges,  but  there 
is  no  marked  tendency  to  substitute  steel  for  iron  in  bridge- 
building.  Steel  is,  however,  largely  used  in  the  manufacture 
of  wire,  including  wire-fencing,  and  for  car  and  carriage 
axles,  carriage  tires,  fire-arms,  screws,  and  many  other  pur- 
poses. But  little  steel  has  yet  been  used  in  this  country  for 
nails  and  horse-shoes. 

Mention  has  been  made  of  the  artistic  finish  of  some  of  our 
iron-work ;  but  the  subject  seems  worthy  of  further  notice. 
It  is  not  only  in  stove-founding,  in  the  graceful  designs  of 
bridges  and  elevated  railways,  and  in  the  delicate  combina- 
tion of  iron  with  other  materials  in  the  construction  and 
ornamentation  of  buildings  that  American  iron-workers  have 
displayed  an  exquisite  taste  and  a  bold  and  dexterous  touch. 
The  fine  arts  themselves  are  being  enriched  by  the  achieve- 
ments of  our  iron- working  countrymen.  An  iron  foundry 
at  Chelsea,  in  Massachusetts,  has  recently  reproduced,  in 
iron  castings,  various  works  of  art  with  all  the  fidelity  and 
delicacy  of  Italian  iron-founders.  The  most  delicate  antique 
patterns  have  been  successfully  copied.  Shields  representing 
mythological  groups  and  classic  events,  medallions  contain- 
ing copies  of  celebrated  portraits,  panels  containing  flowers 
and  animals,  an  imitation  of  a  Japanese  lacquer-tray  one 
sixteenth  of  an  inch  thick,  and  a  triumphal  procession  repre- 
sented on  a  large  salver  comprise  some  of  the  work  of  the 
Chelsea  foundry.  Some  of  the  castings  have  been  colored  to 
represent  bronze,  and  others  to  represent  steel,  while  others 
again  preserve  the  natural  color  of  the  iron.  The  bronzed 
eastings  resemble  beaten  work  in  copper.  Only  American 
iron  is  used.  The  ornamental  uses  to  which  art  castings  of 
iron  may  be  put  are  many,  and  as  they  can  be  cheaply  pro- 
duced it  may  be  assumed  that  a  demand  will  ere  long  be 
created  for  them  that  will  be  in  keeping  with  the  artistic 
taste  which  has  been  so  generally  developed  in  our  country 
during  the  past  few  years. 


440 


ECONOMIC  HISTORY. 


We  conspicuously  fall  behind  many  other  nations  in  the 
use  of  iron  and  steel  for  military  purposes.  We  maintain 
only  a  small  standing  army  and  a  small  navy,  and  hence  have 
but  little  use  for  iron  or  steel  for  the  supply  of  either  of  these 
branches  of  the  public  service.  We  are  also  behind  manv 
other  nations  in  the  use  of  iron  and  steel  sleepers  for  rail- 
way tracks.  We  yet  have  an  abundance  of  timber  for  railway 
cross-ties,  and  hence  do  not  need  to  substitute  either  iron  or 
steel  cross-ties.  Except  possibly  as  an  experiment,  there  is 
not  an  iron  or  steel  cross-tie  in  use  in  this  country.  It  is  a 
singular  fact  that  we  still  import  many  blacksmith's  anvils, 
their  manufacture  being  a  branch  of  the  iron  business  to 
which  we  have  not  yet  given  adequate  attention.  Anvils  of 
the  best  quality  are,  however,  made  in  this  country.  A  far 
more  serious  hiatus  in  our  iron  industry  is  found  in  the  al- 
most total  absence  of  the  manufacture  of  tin  plates,  the  basis 
of  which  is  sheet-iron,  as  is  well  known.  As  we  can  import 
the  crude  tin  as  easily  as  we  import  other  commodities,  our 
failure  thus  far  to  manufacture  tin  plates  must  be  ascribed  to 
the  only  true  cause,  —  our  inability  to  manufacture  sheet-iron 
and  coat  it  with  tin  as  cheaply  as  is  done  by  British  manu- 
facturers. It  is  not  improbable  that  tin  ore  may  be  yet  dis- 
covered in  our  own  country  in  sufficiently  large  quantities  to 
supply  any  domestic  demand  that  may  be  created  for  its  use. 

Conclusion.  — In  reviewing  the  historical  pages  of  this 
report  the  most  striking  fact  that  presents  itself  for  consid- 
eration is  the  great  stride  made  by  the  world's  iron  and  steel 
industries  in  the  last  hundred  years.  In  1788  there  were 
only  eighty-five  blast-furnaces  in  Great  Britain,  most  of 
which  were  small,  and  their  total  production  was  only  68,300 
tons  of  pig-iron.  In  1880  Great  Britain  had  967  furnaces. 
many  of  which  were  very  large,  and  their  production  was 
7,749,233  tons.  A  hundred  years  ago  there  were  no  rail- 
roads in  the  world  for  the  transportation  of  freight  and  pas- 
sengers. Iron  ships  were  unknown,  and  all  the  iron  bridges 
in  the  world  could  be  counted  on  the  fingers  of  one  hand, 
Without  railroads  and  their  cars  and  locomotives,  and  with- 
out iron  ships  and  iron  bridges,  the  world  needed  but  little 


THE  IRON  AND  STEEL  INDUSTRIES. 


441 


iron.  Steel  was  still  less  a  necessity,  and  such  small  quan- 
titles  of  it  as  were  made  were  mainly  used  in  the  manufac- 
ture of  tools  with  cutting  edges. 

The  great  progress  made  by  the  world's  iron  and  steel 
industries  in  the  last  hundred  years  is  as  marked  in  the 
improvcinont  of  the  processes  of  manufacture  as  in  the  in- 
creased demand  for  iron  and  steel   products.     A  hundred 
vcars  asio  all  bar-iron  was  laboriously  shaped  under  the  trip- 
hammer; none  of  it  was  rolled.     Nor  was  iron  of  any  kind 
refined  at  that  timo  in  the  puddling  furnace ;  it  was  all  refined 
in  forges,  and  much  of  it  was  made  in  primitive  bloomary 
forges  directly  from  the  ore.     Nearly  all  of  the  blast-furnaces 
of  a  hundred  years  ago  were  blown  with  leather  or  wooden 
belluws  by  water-power,  and  the  fuel  used  in  them  was  chiefly 
charcoal.     Steam-power,  cast-iron  blowing-cylinders,  and  the 
use  of  bituminous  coal  had  jue..  been  introduced.     Less  than 
sixty  years  ago  heated  air  had  not  been  used  in  the  blowing 
of  blast-furnaces,  and  fifty  years  ago  anthracite  coal  had  not 
ken  used  in  them,  except  experimentally.     Thirty  years  ago 
the  Bessemer  process  for  the  manufacture  of  steel  had  not 
been  heard  of,  and  the  open-hearth  process  for  the  manufac- 
ture of  steel  had  not  been  made  a  practical  success.     Thirty 
years  ago  the  regenerative  gas  furnace  had  not  been  invented. 
Tlie  nineteenth  century  has  been  the  most  prolific  of  all  the 
centuries  in  inventions  which  have  improved  the  methods  of 
manufacturing  iron  and  steel,   and  which  have  facilitated 
their  production  in  largo  quantities. 

Tlie  next  most  important  fact  that  is  presented  in  the 
liistorical  ehaptei's  of  this  report  is  the  astonishing  prog- 
ress which  the  iron  and  steel  industries  of  the  United  States 
liave  made  within  the  last  twenty  years.  During  this 
period  wc  have  not  only  utilized  all  contemporaneous  im- 
provements in  the  manufacture  of  iron  and  steel,  but  we  have 
shown  a  special  aptitude,  or  genius,  for  the  use  of  such  im- 
provements as  render  possible  the  production  of  iron  and 
steel  in  large  quantities.  Enterprising  and  courageous  as 
the  people  of  this  country  have  always  been  in  the  manu- 
facture of  iron  and  steel,   they  have  shown    in  the   last 


1^: 


I 


m 
'111' 


442 


ECONOMIC  HISTORY. 


twenty  years  that  they  have  in  all  respects  been  fully  alive 
to  the  irun  and  steel  requirements  of  our  surprising  national 
development.      If  we  had   not  applied   immense  blowing- 
engines  and  the  best  hot-blast  stoves  to  our  bhmt-furnaccs 
our  present  large  production  of  pig-iron  would  have  boon  im- 
possible.    If  we  had  not  built  numerous  large  rolling-mills 
we  could  not  have  had  a  suf!icient  supply  of  plate-iron  for 
locomotives  and  other  boilers,  the  hulls  of  iron  ships,  oil- 
tanks,  nails  and  spikes,  and  other  important  uses;  nor  of 
sheet-iron  for  stoves  and  domestic  utensils ;  nor  of  too,  angle, 
and  channel  iron  for  bridge-building  and  general  construc- 
tion purposes;  nor  of  iron  rails  for  our  railroads;  nor  of  liar- 
iron  and  rod-iron  for  a  thousand  uses.  If  we  had  not  proniptly 
introduced  the  Bessemer  process  the  railroads  of  tlio  oountry 
could  not  have  been  supplied  with  steel  rails,  and  without  the 
four  and  a  half  million  tons  of  American  steel  rails  that  have 
been  laid  down  in  the  past  twelve  years  our  trunk  railroads 
could  not  have  carried  their  vast  tonnage  of  agrionltinal  ami 
other  products,  for  iron  rails  could  not  have  endured  the  wear 
of  this  tonnage.     If  we  had  not  established  the  manufacture 
of  crucible  steel  and  introduced  the  open-hearth  prucosa  there 
would  have  been  a  scarcity  of  steel  in  this  country  for  the 
manufacture  of  agricultural  implements,  springs  for  railway 
passenger-cars,  tires  for  locomotives,  etc.     Foreign  ooiuitriej 
could  not  in  late  years  have  supplied  our  extraordinary  wants 
for  pig-iron,   rolled  iron,  iron  and  steel  rails,  and  crucible 
and  open-hearth  steel,  for,   if  there  were  no  other  roasons. 
the  naturally  conservative  character  of  their  people  would 
have  prevented  them  from  realizing  the  magnitiulo  of  those 
wants.     If  our  iron  and  steel  industries  had  not  boon  devel- 
oped in  the  past  twenty  years  as  they  have  been  it  is  clear 
that  our  railroad  system  could  not  have  been  so  wonderfully 
extended  and  strengthened,  and  without   this   extension  of 
our  railroads  we  could  not  have  produced  our  largo  annual 
surplus  of  agricultural  products  for  exportation,  nor  could  i 
our  population  have  been  so  largely  increased  by  immigration  j 
as  it  has  been. 
We  cannot  fully  comprehend  the  marvellous  nature  of  the 


THE  IRON  AND  STEEL  INDUSTRIES. 


448 


changes  which  have  taken  place  in  the  iron  and  steel  Indus- 
tries  of  this  country  in  recent  years,  unless  wo  compare  the 
early  history  of  those  industries  with  their  present  devel- 
opment. 

In  Alexander  Hamilton's  celebrated  "  Report  on  the  Sub- 
ject of  Manufactures,"  presented  to  Congress  on  the  5th  of 
Deceinhor,  1791,  just  ninety  years  ago,  it  was  stated  with 
evident  satisfaction  that  "the  United  States  already  in  a 
great  measure  supply  themselves  with  nails  and  spikes,"  so 
undeveloped  and  primitive  was  her  iron  industry  at  that  tiiue. 
In  the  preceding  year,  1790,  "  Morse's  Geography"  claimed, 
in  a  description  of  New  Jersey,  that  "  in  the  whole  State  it 
is  supposed  there  is  yearly  made  about  1,200  tons  of  bar- 
iron,  1,200  ditto  of  pigs,  and  80  of  nail  rods;"  and  in  1802 
it  was  boastingly  declared  in  a  memorial  to  Congress  that 
there  wore  then  150  forges  in  New  Jersey,  "which  at  a 
moderate  calculation  would  produce  twenty  tons  of  bar-iron 
each  annually,  amounting  to  3,000  tons."  In  1880  there 
were  several  rolling-mills  in  New  Jersey  and  several  hundred 
in  the  United  States  which  could  each  produce  much  more 
bar-iron  in  a  year  than  all  of  the  150  forges  of  New  Jersey 
would  produce  in  1802. 

Less  than  fifty  years  ago  the  American  blast-furnace  which 
would  make  four  tons  of  pig-iron  in  a  day,  or  twenty-eight 
tons  in  a  week,  was  doing  good  work.  We  had  virtually 
made  no  progress  in  our  blast-furnace  practice  since  colonial 
(lays.  In  1831  it  was  publicly  proclaimed  with  some  exulta- 
tion that  "one  furnace  erected  in  Pennsylvania  in  1830  will 
in  1831  make  1,100  tons  of  pig-iron."  But,  as  George 
Asmus  has  well  said,  "a  time  came  when  men  were  no 
longer  satisfied  with  these  little  smelting-pots,  into  which  a 
gentle  stream  of  air  was  blown  through  one  nozzle,  which 
received  its  scanty  supply  from  a  leather  bag,  squeezed  by 
some  tired  water-wheel. "  After  1840  our  blast-furnace  prac- 
tice gradually  improved,  but  it  was  not  until  about  1865  that 
any  iuruacc  in  the  country  could  produce  150  tons  of  pig-iron 
>n  a  week.  Ten  years  later,  in  1875, we  had  several  furnaces 
which  could  each  make  700  tons  of  pig-iron  in  a  week;  in 
1880  we  had  several  which  could  each  make  1,000  tons  in  a 


ill'    !■■  ■? 


444 


ECONOMIC  HISTORY. 


t  I 


week ;  and  in  1881  wo  had  one  furnace  which  made  224  tons 
in  a  day,  1,357  tons  in  a  week,  and  5,598  tons  in  a  month. 

In  1810,  seventy  years  ago,  we  produced  only  917  tons  of 
steel,  none  of  which  was  crucible  steel.  In  1831,  fifty  years 
ago,  we  produced  only  about  2,000  tons  of  steel,  not  one 
pound  of  which  was  crucible  steel  of  the  best  quulity.  Sn 
imperfect  were  our  attainments  as  steelmakers  in  1831  that 
we  considered  it  a  cause  of  congratulation  that  "  Auioriean 
competition  had  excluded  the  British  common  blister  stoti 
altogether."  In  1880  we  had  virtually  ceased  to  make  even 
the  best  blister  steel,  better  steel  having  taken  its  place  and 
in  that  year  we  produced  1,247,335  gross  tons  of  steel  of  all 
kinds,  04, 664  tons  of  which  were  crucible  steel.  Oui' produc- 
tion of  Bessemer  steel  and  Bessemer  steel  rails  in  1880  was 
larger  than  that  of  Great  Britain. 

It  was  not  until  1844  that  we  commenced  to  roll  am 
other  kind  of  rails  than  strap  rails  for  our  railroads,  and  nut 
even  in  that  year  were  we  prepared  to  roll  a  single  ton  of  T 
rails.  In  1880  we  rolled  1,305,212  gross  tons  of  rails,  nearly 
two  thirds  of  which  were  steel  rails,  and  nearly  all  of  wliicli 
were  T  rails. 

The  growth  of  the  iron  and  steel  industries  of  the  United 
States  during  the  present  century  is  perhaps  best  cxeniiililicd 
in  the  statistics  of  the  production  of  our  blast-furnaces  at 
various  periods.  In  1810  we  produced  53,908  gross  tons  of 
pig-iron  and  cast-iron;  in  1840  we  produced  315,000  gross 
tons;  in  1860  wc  produced  821,223  gross  tons;  and  in  1880 
we  produced  3,835,191  gross  tons.  Our  production  in  1881 
will  be  about  4,500,000  gross  tons. 

The  position  of  the  United  States  among  iron  and  steel 
producing  countries  in  1880  is  correctly  indicated  in  the  fol- 
lowing table  of  the  world's  production  of  pig-iron  and  steel 
of  all  kinds,  which  we  have  compiled  from  the  latest  and 
most  reliable  statistics  that  are  accessible.  This  table  places 
the  world's  production  of  pig-iron  in  1880  at  17,688,ow 
gross  tons,  and  the  world's  production  of  steel  in  the  same 
year  at  4,343,719  gross  tons.  The  percentage  of  pijr-iron  | 
produced  by  the  United  States  was  nearly  22,  and  its  per- 
centage of  steel  was  nearly  29. 


THE  IRON  AND  STEEL  INDUSTRIES. 


445 


made  224  tons 
s  in  a  month. 
Dnly  917  tons  o( 
1831,  fifty  vcarH 
■  Bteel,  not  oiu' 
!8t  quality.    J*ii 
era  in  1831  that 
that  "  American 
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eel.    Our  produc- 
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iced  to  roll  any 
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446 


ECONOMIC  HISTORY. 


Although  this  country  cannot  produce  iron  and  stoel  as 
cheaply  as  European  countries  which  possess  the  advantaces 
of  cheap  labor  and  proximity  of  raw  materials,  it  is  not  ex- 
celled by  any  other  country  in  the  skill  which  it  di8j)lavs  or 
the  mechanical  and  scientific  economies  which  it  practises  in 
any  branch  of  their  manufacture,   while  in  certain  leadinfr 
branches  it  has  displayed  superior  skill  and  shown  superior 
aptitude  for  economical  improvements.      Our  blast-furnace 
practice  is  the  best  in  the  world,  and  it  is  so  chiefly  because 
we  use  powerful  blowing-engines  and  the  best  hot-blast  stoves, 
possess  good  fuel,  and  carefully  select  our  ores.     The  excel- 
lent quality  of  our  pig-iron  is  universally  conceded.    Our 
Bessemer  steel  practice  is  also  the  best  in  the  world.    We 
produce  misch  more  Bessemer  steel  and  roll  more  Bessemer 
steel  rails  in  a  given  time  by  a  given  amount  of  machinery, 
technically  termed  a  "plant,"  than  any  of  our  European 
rivals.      No  controversy  concerning   the   relative  wnmi 
qualities  of  European  and  American  steel  rails  now  exists. 
and  no  controversy  concerning  the  quality  of  American  Bes- 
semer steel  ever  has  existed.     We  experience  no  difficulty  in 
the  manufacture  of  open-hearth  steel  in  the  Siemens-Martin 
furnace,  and  our  steel  which  is  thus  produced  is  rapidly  com- 
ing into  general  use  side  by  side  with  crucible  steel.   In 
the  manufacture  of  crucible  steel  our  achievements  are  in 
the  highest  degree  creditable.     In  only  one  respect  can  it  be 
said  that  in  its  manufacture  we  fall  behind  any  other  coun- 
try ;  we  have  not  paid  that  attention  to  the  manufacture  of 
fine  cutlery  steel  which  Great  Britain  has  done.    This  is, 
however,  owing  to  commercial  and  not  to  mechanical  reasons, 
American  crucible  steel  is  now  used,  without  prejudice,  in 
the  manufacture  of  all  kinds  of  tools,  and  in  the  manufacture 
of  carriage-springs  and  many  other  articles  for  which  the  best 
kinds  of  steel  are  required.     In  the  quantity  of  open-heartli 
and  crucible  steel  produced  in  a  given  time  by  a  given  plant, 
we  are  certainly  abreast  of  all  rivals.     The  largest  cruoi'!'' 
steel-works  in  the  world  are  those  of  Park,  Brother,  k  Co.. 
at  Pittsburg,  Penn.      Our  rolling-mill  practice  is  fully efia! 
to  the  best  in  Europe,  except  in  the  rolling  of  heavy  armor  i 


THE  IRON  AND  STEEL  INDUSTRIES. 


447 


plates,  for  which  there  has  been  but  little  demand,  and  in 
the  production  of  which  we  have,  consequently,  had  but  little 
experience.  The  quality  of  our  rolled  iron,  including  bar- 
iron,  plate-iron,  sheet-iron,  iron  hoops,  and  iron  rails,  is 
uniformly  superior  to  that  of  foreign  rolled  iron.  In  the 
production  of  heavy  forgings  and  castings,  as  well  as  all 
lighter  products  of  the  foundry  and  machine-shop,  this  coun- 
try has  shown  all  the  skill  of  the  most  advanced  iron-working 
countries  in  Europe.  In  the  production  of  steel  castings  we 
have  exhibited  creditable  skill  and  enterprise,  and  we  are  in 
advance  of  all  countries  in  the  regular  use  of  tne  Bessemer 
converter  for  this  purpose. 

All  of  our  leading  iron  and  steel  works,  and  indeed,  very 
many  small  works,  are  now  supplied  with  systematic  chemi- 
cal investigations  by  their  own  chemists,  who  are  often  men 
of  eminence  in  their  profession.  The  managers  of  our  blast- 
furnaces, rolling-mills,  and  steel-works  are  themselves  fre- 
quently well-educated  chemists,  metallurgists,  geologists,  or 
mechanical  engineers,  and,  sometimes,  all  of  these  combined. 
Our  rapid  progress  in  increasing  our  production  of  iron  and 
steel  is  not  merely  the  result  of  good  fortune  or  the  possession 
of  unlimited  natural  resources,  but  is  largely  due  to  the  pos- 
session of  accurate  technical  knowledge  by  our  iron-masters, 
and  by  those  who  are  in  charge  of  their  works,  combined 
with  the  characteristic  American  dash  which  all  the  world 
has  learned  to  respect  and  admire.  The  "  rule  of  thumb  " 
no  longer  governs  the  operations  of  the  iron  and  steel  works 
of  this  country. 

A  feature  of  our  iron  and  pteel  industries  which  has  at- 
tended their  marvellous  productiveness  in  late  years  is  the 
aggregation  of  a  number  of  large  producing  establishments 
in  districts,  or,  "centres,"  in  lieu  of  the  earlier  practice  of 
erecting  small  furnaces  and  forges  wherever  sufficient  water- 
power,  iron  ore,  and  charcoal  could  be  obtained.  This  ten- 
dency to  concentration  is,  it  is  true,  not  confined  to  our  iron 
and  steel  industries,  but  it  is  to-day  one  of  the  most  powerful 
elements  that  influence  their  development.  It  had  its  begin- 
ning with  the  commencement  of  our  distinctive  rolling-mill 


Iff 


448 


ECONOMIC  HISTORY. 


era,  about  1830.  In  colonial  days  and  long  after  the  Revo- 
lution our  iron-making  and  steel-making  establishments  be- 
longed to  the  class  of  manufacturing  enterprises  described  by 
Zachariah  Allen,  in  his  "Science  of  Mechanics,"  in  1829, 
"  The  manufacturing  operations  in  the  United  States  are  all 
carried  on  in  little  hamlets,  which  often  appear  to  spring  up 
in  the  bosom  of  some  forest,  gathered  around  the  waterfall 
that  serves  to  turn  the  mill-wheel.  These  villages  are  scat- 
tered over  a  vast  extent  of  country,  from  Indiana  to  the 
Atlantic,  and  from  Maine  to  North  Carolina,  instead  of  being 
collected  together,  as  they  are  in  England,  in  great  manu- 
facturing districts. "  While  these  primitive  and  picturesque, 
but  unproductive,  methods  could  not  forever  continue,  it  is 
greatly  to  be  regretted  that  our  manufactures  of  iron  and 
steel  and  other  staple  products  could  not  have  grown  to  their 
present  useful  and  necessary  proportions  unattended  by  the 
evils  which  usually  accompany  the  collection  of  large  manu- 
facturing populations  in  small  areas. 

Upon  the  future  prospects  of  iron  and  steel  industries  it  is 
unnecessary  for  us  to  dwell.  Our  resources  for  the  increased 
production  of  iron  and  steel  for  an  indefinite  period  are 
ample,  and  all  other  essential  conditions  of  continued  growth 
are  within  our  grasp.  We  are  to-day  the  second  iron-mak- 
ing and  steel-making  country  in  the  world.  In  a  little  while 
we  shall  surpass  even  Great  Britain  in  the  production  of  steel 
of  all  kinds,  as  we  have  already  surpassed  her  in  the  pro- 
duction of  Bessemer  steel  and  in  the  consumption  of  all  iron 
and  steel  products.  The  year  1882  will  probably  witness  this 
consummation.  We  are  destined  also  to  pass  Great  Britain 
in  the  production  of  pig-iron.  These  conditions  and  results 
are  certainly  gratifying  to  our  national  pride,  for,  of  tliem- 
selves,  they  assure  the  ultimate  pre-eminence  of  the  United 
States  among  all  civilized  countries.  If  it  be  true,  as  recorded 
in  the  second  chapter  of  Daniel,  that  "iron  breaketh  in  pieces 
anrl  subdueth  all  things,"  the  country  which  produces  and 
consumes  the  most  iron  and  steel  must  hold  the  first  rank. 
When  the  United  States  takes  the  position  which  it  is  des- 
tined soon  to  take,  as  the  leading  iron  and  steel  producing 


THE  IRON  AND  STEEL  INDUSTRIES. 


449 


lanics,"  in  1829. 
ted  States  are  all 
ipear  to  spring  up 
and  the  waterfall 
villages  are  scat- 
a  Indiana  to  the 
I,  instead  of  being 
1,  in  great  manu- 
3  and  picturesque, 
^er  continue,  it  is 
tares  of  iron  and 
ave  grown  to  their 
unattended  by  the 
on  of  large  manu- 

;eel  industries  it  is 
8  for  the  increased 
lefinite  period  are 
'  continued  growth 
second  iron-mak- 
In  a  little  while 
iroduction  of  steel 
[d  her  in  the  pro- 
imption  of  all  iron 
Dbably  witness  this 
lass  Great  Britain 
itions  and  results 
ide,  for,  of  tliem- 
ice  of  the  United 
ic  true,  as  recorded 
jbreaketh  in  pieces 
lich  produces  and 
fid  the  first  rank. 
m  which  it  is  des- 
d  steel  producing 


as  well  as  consuming  country,  the  saying  of  Bishop  Berkeley, 
that  "  Westward  the  course  of  empire  takes  its  way, "  will 
receive  a  new  interpretation;  for  the  iron  industry,  which 
had  its  beginning  in  Asia,  and  then  passed  successively  to 
the  countries  along  the  Mediterranean,  upon  the  Rhine,  and 
in  the  north  of  Europe,  will  then  have  made  the  circuit  of 
the  world. 


29 


ill  .^tf  IP^'^^ 


450 


ECONOMIC  HISTORY. 


m 


XVI. 

LES  DETTES  PUBLIQUES. 
From  Neymarck's  Les  Dettes  Publiques  Europeennes,  pp.  86-102. 

L— AUGMENTATION  DES  DETTES  PUBLIQUES  DEPUIS  1870. 

T^ANS  cette  longue  Enumeration  de  chiffres,  ce  qui  frapp? 
•'-^tout  d'abord  I'esprit,  c'est  I'augraentation  considerable 
de  la  dette  publique  des  Etats  EuropEens  depuis  1870.  Cette 
dette  s'Elevait  k  75  milliards  en  1870  environ ;  elle  atteint 
115  milliards  en  1886.  L'augmentation  n'est  pas  raoindre 
de  40  milliards.^ 

Nous  avons  pris  ^  dessein  cette  date  de  1870  qui  nous 
rappelle  les  plus  grands  mallieurs  que  notre  pays  ait  jamais 
supportEs,  les  lourdes  charges  qui  ont  EtE  la  consequence  de 

1  D'apr^s  le  journal  de  la  "Society  de  Btatistique"  (avril,  1867),  la  dette 
publique  d'Europe  s'elevait,  en  1865-1866,  aux  chiffres  suivants :  — 

Depenoes  totalea  des  budgets 10  milliards  508  millions. 

CapitAlisation  des  dettes 60       "        013      " 

Int^rSt  et  amortissement 2       "        488      " 

La  population  de  I'Europe  ^tait  (Jvalud  it  291,738,379  habitants;  la  dette  par 
habitant  reprc'sentait  226  fr.  30. 

M.  Paul  Boiteau,  dans  son  article  sur  le  budget  general  de  I'^tat,  insc'redans 
le  Dictionnaire  des  finances  de  M.  Le'on  Say,  a  re'uni  sous  le  titre  de ;  "  Budgets 
Europe'ens"  la  plupart  des  budgets  du  continent,  et  pour  en  faciliterlVtude,il 
a  plau^  en  regard  du  montant  des  de'penses  pre'vut?  pour  IV'xorcice  ISSa.le 
montant  des  dettes  consolidees  et  autres  qui  grevent  I'actif  des  difTi'rents  Ms 
ainsi  que  le  montant  des  ddpenses  militaires  et  celles  du  service  de  la  Dette  et 
de  ramortisscment.    II  obtient  les  chiffres  suivants  :  — 

Provisions  totales  des  diipenses  budgOtaires  annuelles    .    18  milliards  ^4*-  Dillioos. 
Capitalisation  des  dettes  consolid^s,  des  dettes  amortis- 

sables,  annuit<;s  dlverses,  etc .    .     .  lOH        "        431       " 

Ddpenses  du  service  dei  dettes  et  de  I'amortissement  4        "        8ii4       " 

Ddpenses  militaires,  guerre  et  marine 4       "        43il      " 

On  pourra  comparer  ccs  chiffres  k  ceux  que  nous  donnons  plus  loia. 


i 


LES  DETTES  PUBLIQUES. 


451 


ss. 

PEENNE8,  PP.  88-102, 
UES  DEPUIS  1870. 

ffres,  ce  qui  frappo 
ation  considerable 
iepuislSTO.  Cette 
iviron;  elle  atteint 
n'est  pas  raoindrc 

de  1870  qui  nous 

tre  pays  ait  jamais 

la  cons<iquence  de 

."  (avril,1867),ladette 
suLvants:  — 
» milUardB  508  milUons. 
«•        013      " 
438      " 

I9 habitants;  ladettepat 

i?raldel':fetat,inscreto 
3U9letltre<le:"  Budget* 
L,urenfaciUterl'etude,>l 

L  pour  I't'xercice  18?3.k 

•actifdesdiff^'TentsEwu 

Idu  service  de  la  Detteet 


milliards 

jj4«i  mil'-ion' 

(t 

431 

K 

i( 

8.V4 

(( 

11 

431) 

(1 

3imon9 


plus  loin- 


la  guerre,  le  fardeau  qui  pdse  sur  nous  tous.  La  guerre  de 
1870  a  cout^  k  la  France  plus  de  10  milliards ;  sans  elle  nous 
ne  serions  pas  groves  d'impdts  ^crasants,  et  aucun  peuple  no 
supporterait  plus  facilement  que  nous  le  poids  de  sa  dette 
publique. 

Aucun  pays  n'a,  en  effet,  subi  des  d^sastres  aussi  grands 
que  les  ndtres  ;  aucuu  n'a  eu  une  indemnity  de  5  milliards  k 
payer  tl  I'dtranger;  aucun  n'a  dii  reconstituer  sa  puissance 
militaire,  son  materiel  de  guerre ;  aucun  n'a  eu  k  refaire,  pour 
aiiisi  dire,  la  patrie  elle-meme  tout  entidre.  Et  cependant  que 
voyons-nous  ?  A  I'exception  de  I'Angleterre  qui,  par  suite 
de  divers  remboursements  d'annuit^s,  a  pu  diminuer  sa  dette 
dc  1,350  millions ;  h  I'exception  du  Danemarck  qui,  par  suite  de 
conversions  heureusement  effectu^es,  a  pu  r^duire  sa  dette 
de  20  millions,  tous  les  pays  bo  sont  endettds  depuis  1870 
dans  dcs  proportions  ^normes.  Voici  sur  ce  point  quelques 
chiffres  prdcis.  Nous  rangeons  les  Etats  par  ordre  d'accroisse- 
ment  de  leurs  dettes  depuis  1870. 

AUGMENTATION  DU  CAPITAL  NOMINAL  DE  PLUSIEURS 
DETTES  PUBLIQUES  DEPUIS  18T0. 

France 12  milliards. 

Russiei 11        " 

Prusso 3       "  217  millions. 

Italie 3        "  132  " 

Hongrie 2        "  249  " 

Autriche 1        "  770  " 

Espagne 1        "  300  " 

Belgique 1        «  89  " 

Rouinanie 701  " 

Allemagne 526  " 

Saxe 388  " 

Griice 270  " 

Serbie 244  " 

Wiirtemberg 194  " 

Suede 181  " 

llainbourg 24  " 

FitilanJe 20  " 

Cotte  augmentatio^i  du  capital  nominal  des  dettes  publiques 
europ^icuues  qui  atteint,  depuis  1870,  40  milliards  environ, 

1  Augmentation  depuis  1866. 


i'f    1 


^  I., .  I')  »|  ••^^-r- 
< 


452 


ECONOMIC  HISTORY. 


a  en  pour  consequence  Taugmeiitatiou  des  int^rets  et  des 
amortisseiuents  anuuels  pour  les  emprunts  contractus,  I'ac- 
croissemeut  des  dupenses  totales  des  budgets,  une  surcharge 
dans  les  impdts.  Combien  ne  serious-nous  pas  alldgos  si 
nous  n'avions  pas  k  payer  chaque  ann^e  les  lourds  impots  qui 
grevent  notre  commerce  et  notre  Industrie,  et  qui,  s'ajoutant 
aux  frais  de  production,  ont  rendu  la  concurrence  a  nos 
produits  d'autaut  plus  facile  ?  Toutes  proportions  gaid<;es, 
les  pays  d'Europe  souffrent,  comme  nous,  de  ces  lourdes 
charges  qui,  dans  tous  les  pays,  oberent  les  contribuables, 
C'est  la  guerre,  toujours  la  guerre,  qui  redoit  aux  budgets, 
Depuis  seize  ans,  les  budgets  de  la  guerre  et  de  la  marine  ont 
coute  h  la  France  plus  de  11  milliards,  c'est-^rdire  plus  de  700 
millions  par  an ;  TAllemagnc  et  la  Russie  n'ont  pas  d^pcuse 
moins  de  10  millards,  chacun  pendant  la  meme  periodc, 
I'Autriche  et  I'ltalie  presque  le  meme  chiffre.  Voila  done 
cinq  grands  pays  qui,  en  vue  d'une  guerre  probable,  d^pensent 
tous  les  ans  de  500  k  900  millions,  depuis  seize  aus.  Que 
couterait  done  la  guerre  elle-meme  ? 

Les  Etats  europ^cns  paient  annuellement  pour  leurs  dupenses 
de  la  guerre  et  de  la  marine  k  pen  pr^s  les  memos  sommes  que 
pour  I'intdret  et  I'amortissement  de  leurs  dettes.  D'apres  les 
dernlers  bv  ^ts,  ainsi  que  le  prouvent  les  chiffres  que  nous 
publiuiis  pill  loin,  la  guerre  et  la  marine  coutent  a  rEurope 
4  milliards  ■•J.H  millions, alors  que  Tint^ret  et  ramortisscmcnt 
des  dottes  publiques  r^clament  5  milliards  343  millions.  Eu 
voici  le  relev^  :  — 


LES  DETTES  PUBLIQUES. 


453 


it^reta  et  des 
)ntract<is,  I'ac- 
une  surcharge 
pas  all<5ges  si 
irds  impots  qui 

qui,  s'ajoutant 
jurrencc  a  nos 
irtions  gaidi-es, 
de  ces  lourdcs 
i  contribuables, 
)it  aux  budgets, 
le  la  marine  ont 
<lire  plus  de  700 
ont  pas  d<ii)euse 

mSme  periode, 
[re.  Voila  douc 
3bable,d^pensent 

seize  aus.    Que 


II. -DEFENSES   DE  LA  GUERRE,  DE  LA  MARINE,  CAPITAL 
NOMINAL  ET  INTfiR^TS  DES  DETTES. 


Capital 

Inters  ts 

IMpenies 

EtaU. 

Kzercices  flnancken. 

nominal  de 
la  deCM. 

et  amort, 
ann. 

ann. 
Querre  et 
mariue. 

Milliards. 

MitliODB, 

MilUonf. 

MllUooB. 

F-isse 

ler  avril,  1886    .    . 

4.814 

220     ) 
20.1  J 

539.1 

Alleinagne.    . 

31  decembre,  1886  . 

526 

Autriclie    .    . 

31  decembre,  1884  . 

9.288 

389.9  1 
206.8  J 

842 

Hongriy      .    . 

31  decembre,  1884  . 

3.178 

Wiirtemberg  . 

31  ddcembre,  1886  . 

525 

21.5 

Saxe.    .    .     . 

31  decembre,  1886  . 

800 

33.2 

Haiiibiiiirg .    . 

31  decembre,  1883  . 

178 

8.7 

Bavicru .     .     . 

ler  avril,  1886    .    . 

1.790 

61.1 

Bailf.    .     .     . 

31  decembre,  1886  . 

53 

2.1 

fitats  iiUemands 

31  decembre,  1885  . 

288 

11 

Italie     .... 

31  decembre,  1886  . 

11.131 

632 

842.6 

Sui'ile    .     .     . 

31  decembre.  1885  . 

345 

16.4 

85.5 

Norwbjfe     .    . 

30  luin,  1885  .     .     . 

161 

6 

183 

Daneniiirk 

31  decembre,  1886  . 

274 

12.4 

23 

Pays-IJiis    .     .     . 

31  decembre,  1886  . 

2.260 

69.6 

69.6 

Beigique    .    .    . 

31  de'cembre,  1886  . 

1.771 

86.6 

45.6 

E.ipag.'e     .     .     . 

ler  jiiillet,  1886  .     . 

6.042 

274.1 

200.3 

Piirtus;:.!    .     . 

ler  juillet,  1886.     . 

2.821 

89.3 

39.3 

Angleti  Te  ^    . 

31  mars,  1885      .     . 

17.829 

737.5 

740.2 

Siii-ise   .... 

ler  Janvier,  1886     . 

82 

1.8 

17.1 

SiTbie    .    .    . 

i4  juin,  1886  .     .     . 

244 

13.7 

16.2 

Ki)uiiiHiiie  .    . 

ler  avril,  1887    .     . 

729 

69.2 

28.5 

Ork'e    .    .     . 

ler  Janvier,  1886     . 

348 

83 

23 

Turquie     .     . 

188f)-1881  .... 

2.622 

65.4 

200 

Bulgarie     .     . 

ler  Janvier,  1885     . 

• 

2.1 

Finlande    .     . 

31  decembre.  1886  . 

66 

6.9 

6.1 

liussie   .    .    . 

31  decembre,  1886  . 

18.028 

1.038 

982.4 

France  .    .    . 

31  decembre,  1886  . 

31.000 

1.336 

859.5 

Totau.x 

117.112 

5.343.2 

4.628.1 

Daus  qucllea  proportions  ^normes  les  dcttes  pnbliques  de 
toute  I'Europe  ne  pourraient-elles  pas  etre  rdduites  si  Ics 
dcpenses  do  la  guerre  n'absorbaient  pas  tous  les  ans  plus  de 
^0%  de  ces  memos  dettes  ?  Toutes  les  puissances  enro- 
pi'timcs  ont  des  embarras  financiers  ;  toutes  ou  presque  toutes 
auguK'utent  ou  ont  besoin  d'augmenter  leurs  impots.  Toutes, 
sans  exception,  font  des   armements    considerables.     Cette 

'  D'nprbs  une  note  de  I'honorable  M.  Hangcosck,  de  la  Socie'td  de  etatistique 
lie  Londres,  de  fin  mars,  1884,  Ji  fin  mars,  1885,  I'Angloterre  paie  comme  interet 
■2,000,000  £,  et  7,000,000  £  comme  amortissement,  soit  au  total  29,600,000  £. 


rr;,!  ' 


454 


ECONOMIC  HISTORY. 


situation  pr^sente  les  plus  graves  dangers  et  plus  que  jamais 
ccpendant,  le  maintien  de  'a  paix  est  n^ccssairc  ^  I'Europc 
pour  consolidor  son  credit,  am^liorer  I'^tat  de  ses  finances, 
donner  de  Tessor  et  de  la  confiance  au  commerce  et  ^ 
I'industrie. 

III. -LES    CONVERSIONS   DE    BENTES    A  L'^TRANGER    ET  EN- 
FRANCE. 

Et  cependant,  malgrd  les  charges  de  toute  nature  qui  p^scnt 
sur  les  Etats,  les  rentes  de  ces  m6mes  pays  se  sent  ndgoci^es 
pendant  I'ann^e  1886  presque  toutes  aux  plus  hauts  coiirs 
qu'elles  aient  cotds  depuis  1870.  Non  seulement,  grSce  ^ 
I'abondance  des  capitaux  et  k  Tabaissement  du  taux  dc 
I'intdr^t,  les  fonds  publics  ont  hauss^,  mais  11  a  ^td  r^alis^, 
en  matifire  de  finances,  des  progrds  considerables. 

Les  Etats,  non  plus  que  les  villes  et  les  soci^t^s  industrielles 
ou  financiSres,  n'h^sitent  pas  h,  effectuer,  sur  une  ties  large 
^chelle,  des  operations  qu'on  eiit  ^  peine  os^  concevoir  il  y  a 
moins  de  trente  ans. 

Aujourd'hui  des  Etats,  dontla  puissance  financi^re  a  toujoiirs 
ete  relativement  restreinte,  peuvent  contractor  des  emprunts 
qui  d^passent  de  beaucoup  ceux  que  naguSre  encore  des 
nations  riches  n'eussent  tenths  qu'avec  apprehension. 

Toutes  les  combinaisons  auxquelles  peuvent  preter  les  fi- 
nances d'etat  qui  dtaient  si  longtcmps  restdes  dans  le  domaine 
de  la  theorie,  sont  pleinement  entries  dans  la  pratique  et  se 
rdalisent  couramment.  Bien  des  pr^jug^s  econoraiques  et 
financiers  se  sont  dissip^s  ;  bien  dep  principes,  encore  contest^s 
nagufire,  ont  triomphe  et  se  sont  imposes. 

Le  credit  a  acquis  une  force  d'expansion  inouie ;  les  fonds 
publics,  les  valeurs  mobilidres  se  sont  de  plus  en  plus  rdpan- 
dues,  vulgarisees,  democratisees  en  quelque  sortc.  Leiir 
gronde  facilite  de  circulation,  leur  mobilite,  leur  diffusion. 
leur  accessibilite  k  toutes  les  fortunes,  petites  ou  grandcs,  leur 
ont  assure  une  faveur  que  Ton  pent  trouver  excessive,  mais 
qui  est,  k  divers  points  de  vue,  tr^s  justifiee.  Get  essor  de  la 
fortune  mobilifire  a  determine  une  veritable  revolution  dans 
les  conditions  financifires  de  I'existence  des  peuples. 


LES  DETTES  PUBLIQUES. 


455 


RANGER    ET  EN 


Emprunts,  unifications  de  dettes,  conversions,  sont  dcs 
opdrations  devenues  familidres  memo  aux  moindres  Etats. 
Et,  chose  assez  strange,  c'est  la  France  qui,  aprfis  avoir  ^t^, 
avec  I'Angleterre,  I'initiatrice  des  grandes  r^formes  fiuan- 
cidrcs,  a  dt^  depuis  quelques  amides,  parmi  les  nations,  la  plus 
timide  ^  rdaliser  les  combinaisons  heureuses,  legitimes,  profi- 
tables,  que  la  puissance  et  la  solidity  de  son  crddit  lui  rcndent 
si  facilcs. 

Rien,  en  effet,  de  plus  curieux  h,  observer,  autour  de  nous, 
que  les  nombreuses  operations  de  conversion  ddj^  accoraplies 
avec  succ^s  ou  en  voie  de  preparation.  Si  on  pent  reprocher 
^certains  £l tats  une  propension  trop  gni  le  &  emprunter,  il 
faut  bien  reconnattre  qu'ils  se  preoccupent  aussi,  pour  la 
plupart,  de  n'emprunter  qu'au  plus  bas  prix  possible.  Dds 
que  leur  credit  s'dtend  et  s'ameiiore,  ils  s'efforcent  de  rem- 
placer  les  anciennes  dettes  couteuses,  ondreuses,  par  des 
dettes  plus  IdgSres,  contractdes  h,  un  taux  moins  dlevd.  Ce 
sont  maintenant  dcs  puissances  financiSres  de  second  et  de 
troisiiJine  ordre  qui  nos  donnent  I'exemple.  Dans  cet  ordre 
d'iddes  et  de  faits,  il  n'est  certainement  pas  inutile  d'examiner 
comment  se  sont  effectudes  les  conversions  rdcentes  et  d'in- 
diquer  les  divers  procddds  jusqu'ici  employes. 

Depuis  1870,  deux  fonds  d'fitats  fran^als  ont  iii  Tobjet 
d'une  conversion  :  I'emprunt  Morgan,  et  la  rente  5%.  On  se 
lappelle  comment  elles  s'effectu^reut :  on  offrit  aux  porteurs 
d'obligations  Morgan  6%,  le  mSme  revenu  en  rente  3^, 
inoyeniiaiit  une  soulte  de  124  fr.  par  obligation.  Les  porteurs 
de  rentes  5%  eurent  h.  opter  entre  le  remboursement  k  100  fr. 
de  leurs  rentes  et  I'dchango  centre  un  nouveau  titre  de 
rente  4^^  non-convertible  avant  un  ddlai  do  10  ans  qui 
expire  eu  1893. 

La  Belgique  a  opdrd  trois  conversions  :  son  4J  est  devenu 
du  4%,  puis  du  3%.  Pour  la  premiere  operation,  elle  cut 
iram^diatement  recours  k  un  syndicat  de  banquiers,  qui  se 
chargeait  du  placement  de  la  rente  nouvelle,  tandis  que  I'^tat 
op^rait  le  retrait  de  la  rente  convertie.  Pour  la  seconde  con- 
version, le  gouvernement  beige  voulut  opdrer  seul  et  dmettre 
directement  sa  rente  nouvelle ;  il  n'obtint  pas  tout  le  succfis 


!fv— ,, 


466 


ECONOMIC  HISTORY. 


Bj 


■1  h 


d<Ssird  ct  dut,  aprfia  des  cssais  peu  favorablcs,  accepter  Ic 
coucours  qui  lui  avait  ^i6  donn<$  prdcddcmmcnt. 

Tout  rdccmmeut,  ainsi  qu'on  I'a  vu  dana  le  cours  dc  ccttc 
^tudc,  la  Belgiquo  a  rdali8<}  uno  troisi^mo  conversion  en  con- 
vertissant  scs  rentes  4%  centre  du  3^%.  Cette  op(;ration, 
effectude  directement  par  le  Trdsor,  obtint  un  plein  succ^s. 

La  Suedo  a,cllc  aussi,  transform^  successivement  son  \l  en 
4%  ct  en  3i%  en  recourant  ^  I'intermddiaire  dcs  grandcs 
maisona  de  banque.  Celles-ci  dmcttaient  sur  les  marclids 
strangers  la  nouvelle  rente  suddoise,  tandis  que  Ifi'tat  restait 
chargd  du  retrait  des  anciens  titres. 

On  con9oit  que  I'intervention  des  syndicats  et  des  groupes 
financiers  soit,  pour  ainsi  dire,  I'unique  moyen  dcs  pctits 
Etats  qui  n'ont  pas  de  marchd  national.  11  est  certain  que  la 
Roumanie,  par  exemple,  n'a  pu  effectuer  la  conversion  de  sa 
dette  6%  que  grace  au  concours  de  puissantes  raaisons  aux- 
quelles  elle  s  est  adressde.  Ce  sont  ces  dernieres  qui  pla^aient 
la  nouvelle  rente  tandis  que  I'liltat  remboursait  I'anclenne. 

L'Espagne,  lors  de  la  rdcente  conversion  de  ses  eniiirunts 
de  rile  de  Cuba,  s'est  adressde  h  un  groupe  de  banquiers :  elle 
s'entendait  avec  eux  pour  le  prix  de  la  nouvelle  rente  ^  cr^er, 
et  avec  le  produit  du  nouvel  emprunt  remboursait  des  dettcs 
anciennes  contractdes  ^  plus  gros  intdrSt, 

Les  grands  Etats  qui  ont,  presque  tous,  d'importants 
marches  financiers  ne  se  croient  cependant  pas  toujours 
assez  surs  de  leurs  propres  forces  pour  dddaigner  le  concours 
des  banques  et  des  institutions  de  crddit.  Sans  ces  hautes 
influences,  aucune  operation  de  credit  importante  ne  pourrait, 
sans  doute,  acqudrir  un  caractdre  international  et  obtenirla 
participation  des  marches  extdrieurs.  Aussi  toutes  les  con- 
versions opdrees  dans  de  larges  proportions  ne  ront-clles  ^t^ 
qu'avcc  la  participation  des  syndicats. 

La  Hongrie  a  effectud  la  conversion  dfi  sa  rente  6%  en  rente 
4%  en  or,  et  elle  prdpare,  en  ce  moment  meme,  une  opera- 
tion uu  meme  genre  sur  d'autres  dettea.  lei,  les  banquiers, 
groupds  en  vue  de  cette  transformation,  se  sont  cliargi^s  ii  la 
fois  et  du  placement  de  la  rente  nouvelle  et  du  retrait  de 
la  rente  ancienne.    Le  remboursement  au  pair  n'est  devenu 


LES  DETTES  PUBLIQUES. 


467 


lc9,  accepter  Ic 
t. 

B  cours  de  cettc 
version  en  con- 
Cctte  op(5  ration, 
plein  succiis. 
cment  son  ^  en 
lire  dcs  grandcs 
lur  Ics  marchiis 
que  ifi'tat  restait 

:8  et  des  groupes 
noyen  dcs  pctits 
est  certain  que  la 

conversion  de  sa 
ites  maisons  aux- 
ieres  qui  plai^aient 
lait  Vancienne. 

de  ses  cmpnmts 
de  banquiers :  elle 
■elle  rente  a  cr^'cr. 
loursalt  des  dettcs 


obligatoire  pour  les  portcurB  do  6%  hongrois  qu'i^  Tissue  do 
Topcratioii  qui  s'est  effcctu<JO  par  fractions  dcholonndcs.  La 
loi,(|iii  a  fixd  les  conditions  dans  Icsquellcs  ccttc  conversion 
fut  autoris<JC,  dtait  con9ue  presquo  dans  les  mumes  termes  que 
le  projc't  (jue  nous  formulions  nous-niCine  des  lo  mois  d'aoiit, 
1876,'  en  vuo  dc  la  conversion  dventuellc  du  5f/o  fran^ais. 

En  Allemagne,les  conversions  do  fonds  prussions,  bavarois, 
ct  wurtcnibergcols  se  sont  opdrdes  par  remission  d'emprunts 
dont  le  produit  a  servi  au  remboursemeut  des  anciennes 
rentes. 

A  I'dtrangcr,  il  nous  reste  3.  citer,  au-dcssus  dc  tons,  I'ex- 
emplo  des  Etats-Unis  qui  ont  accompli  avec  une  liabiletd  et  un 
esprit  dc  suite  merveilleux  des  conversions  successives  dans 
les  conditions  les  plus  hcureuses  et  les  plus  favorablcs,  sans 
que  les  particuliers  aient  jamais  eu  a  souffrir  des  consd- 
quenccs  dc  ces  transformations  rdpdtdes.  Grflce  k  la  prdvoy- 
ance  avec  laquelle  TAmdrique  du  Nord  avait  crdd  ses  rentes 
par  series,  des  conversions  partielles  ont  pu  se  succdder 
lapidcment ;  et  Ton  a  vu  en  peu  d'anndes  du  6%  se  trans- 
former en  5%,  puis  en  4«j^,  puis  en  3^.  Ces  operations 
nombreuscs,  les  Etats-Unis  les  ont  effectudes  directement  sur 
leurs  propres  marchds  et  k  I'extdrieur  avec  le  concours  de 
grandes  maisons  de  banque. 

Mais,  en  dehors  des  exemples  que  nous  ont  donnds  les 
autres  nations,  nous  pourrions  rappeler  ceux  que,  sous  des 
formes  divcrses,  nous  ont  offcrts  nos  ddpartcments  fran^ais  et 
nos  pro[)res  villes.  L^  encore,  nous  trouvons  dcs  efforts  tr^s 
louables  ct  des  combinaisons  trfis  varldes.  Nous  avons  vu  des 
villes  recourir  au  remboursemeut  au  pair  d'ancionncs  dcttes  et 
a  des  empnints  plus  avantageux  pour  alldger  leurs  charges, 
les  unes  s'adressant  au  public,  les  autres  s'assurant  I'appui  de 
syndicats,  d'autres  enfin  traitaut,  sans  autre  intermddiaire, 
avec  le  Crddit  Foncier  de  France  qui  leur  garantissait  k  un 
taux  maximum  les  capitaux  dont  elle  avaient  bcsoin  pour 
rembour.sor  la  dette  antdrieure  contractde  h  un  taux  plus  dlevd. 

Nous  avons  vu  enfin,  plus  pr^s  de  nous  encore,  le  Crddit 
Foncier  de  France  profiter,  pour  son  propre  compte,  et  au 

'  Voir  notre  dtude  :  La  Conversion  de  la  Rente  6%.    Paris,  Dentu,  edit.,  1876. 


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ECONOMIC  HISTORY. 


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grand  profit  de  sa  vaste  clientele  d'emprunteurs,  de  I'abaisse- 
ment  du  prix  de  Targent,  et  convertir  des  obligations  entrat- 
nant  une  annuity  ^lev^e  par  des  titres  n'exigeaut  qu'uiie 
annuity  notablement  inf^rieure.  On  sait  avee  quelle  simpli- 
city 8*est  efifectu^e  cette  operation :  lea  portciurs  des  obliga- 
tions &  convertir  avaient  un  droit  de  pr^f^rence  dans  la 
souscription  des  obligations  nouvelles ;  ils  restaient  libres  de 
n'en  pas  user,  mais  ^taient  diiment  avertis  du  remboursement 
prochain  et  obligatoire  des  titres  anciens. 

Ainsi  les  nations  qui  nous  entourent  et,  chez  nous-mSmes, 
les  provinces,  les  villes,  les  institutions  de  credit,  ont  pratique 
avec  emprcssement  et  avec  succds,  sous  les  formes  les  plus 
diverses,  des  conversions  qui,  toutes,  ont  ^t^  profitables.  En 
ce  moment  mSme,  de  grandes  operations  de  ce  genre  sent  \ 
pr^voir.  II  n'est  pas  douteux,  en  effet,  que  TAngleterre  ne  se 
prepare  &  une  nouvelle  conversion  de  ses  Consolid^s  dont  les 
cours  sont  au-dessus  du  pair ;  dds  que  I'occasion  sera  propice, 
la  transformation  sera  faite.  En  Italic,  la  conversion  de  la 
rente  5^  est  ^  I'ordre  du  jour,  et  il  ne  s'^coulera  pas  beaucoup 
dfl  temps  avant  qu*elle  ne  soit  r^alis^e.  D^jii  le  gourerne- 
ment  a  pr^par^  un  projet  pour  convertir  plusieurs  dettes 
rachetables  et  offre  du  4i  a  la  place  du  5^. 

II  est  ik  remarquer  que  toutes  ces  conversions  de  rentes,  qui 
ont  diminu^  Tint^rSt  pay^  par  les  Etats  &  leurs  prSteura,  n'ont 
nullement  diminu^  les  charges  de  ces  divers  pays.  Pour  Stre 
juste,  Equitable,  toute  conversion  de  rentes  doit  avoir  pour 
consequence  une  diminution  dMmpdts.  II  n'en  a  ricn  Hi 
Prenez  tons  les  budgets  des  pays  qui  ont  effectue  des  conrer- 
sions ;  comparez  les  chiffres  des  d^penses  publiques  et  des 
impdts  k  ceux  qui  etaient  inscrits  avant  et  aprds  les  conver- 
sions, V0U8  trouverez  partout  des  augmentations  de  d^penses 
et  d'impdts. 

II  faut  remarquer,  d*autre  part,  que  presque  toutes  ces 
conversions  n'ont  pu  Stre  realisdes  avec  succds  qu'autant  que 
la  haute  banque  est  intervenue  et  leur  a  donn^  son  concours. 
II  convient  enfin  de  dire  que  toutes  ces  operations  ont  ^t^ 
facilities  par  Tabondance  toujours  croissante  des  capitaux 


Im 


LES  DETTES  PUBUQUES. 


459 


sura,  de  Tabaisse- 
l)ligations  entrat- 
exigeant  qu'une 
ec  quelle  simpli- 
t'jurs  des  obliga- 
Sf^rence  dans  la 
■estaient  libres  de 
IX  remboursement 

chez  nous-mSmeg, 
r^dit,  ont  pratiqu^ 
s  formes  les  plus 
i  profitables.  En 
e  ce  genre  Bont4 
I'Angleterre  ne  se 
^onsolid^s  dont  les 
asion  sera  propice, 
t  conversion  de  la 
ulera  pas  beaucoup 
Ddjille  gouverne- 
r  plusieurs  dettes 

rtons  de  rentes,  qui 
sure  prSteurs,  n'ont 
[8  pays.  Pour  6tre 
ts  doit  avoir  pour 
ll  n'en  a  rien  ^t^, 
Iffectu^  des  conver- 
publiques  et  des 
aprSs  les  conver- 
itions  de  d^penses 

Lresque  toutes  ces 
ccds  qu'autantque 
Inn^  son  concours. 
operations  ont  <t^ 
tnte  des  capitaux 


disponibles,  et  par  la  baisse  du  taux  de  Tint^rSt,  consequence 
de  cette  abondance  des  capitaux. 

IV.-ABAISSEMENT  DU  TAUX  DE  L'INTilRftT  DE  L'ABGENT 

DBPUIS  1870. 

Depuis  1870,  et  surtout  depuis  le  jour  oit,  pour  la  premiere 
fois  depuis  la  guerre,  la  rente  5%  fut  cote  au  pair,  c'e8t4-dire 
^  100,  le  4  septembre,  1874,  des  changements  profonds  se  sont 
produits  sur  les  marches  fran^ais  et  etrangera  dans  le  taux  de 
capitalisation.  Successivement,  d'annde  en  annee,  lentement 
d'abord,  puis  par  Stapes  vigoureusement  franchies,  les  valeurs 
de  premier  ordre,  de  premidre  sfirete,  descendirent  de  5^^ 
d'int^ret  ^^h%\  les  valeurs  de  second  ordre,  qui  rapportaient 
6^,  7,  et  8%,  descendirent  &  5%  et  m@me  au-dessous.  A 
mesure  que  le  capital  de  ces  valeurs  augmentait,  leur  revenu 
devenait  naturellement  moins  eieve. 

Au  lendcmain  de  la  guerre,  un  capital  de  100,000  place  en 
rentes  5%  aurait  produit  5.500  &  6.000  fr.  de  rentes.  Le 
meme  capital,  place  aujourd'hui  en  rentes  fran^aises  3^  pro- 
duirait  &  peine  8.700  francs. 

Depuis  1870,  le  6^  Americain  a  disparu;  converti  d'abord 
en  5%,  puis  en  4^,  le  voiI&  maintenant  en  Z%  en  attendant 
une  nouvelle  conversion  en  2J. 

Le  \\  Beige,  les  funds  Allemands,  tela  que  les  b%  Badois, 
Bavarois,  Wiirtembergeois,  etc.,  ont,  sur  la  cote,  cede  la  place 
Uea  titrcs  dc  moindre  rapport,  k  des  rentes  de  8^  et  dc  8^, 
qui  atteignent  le  pair. 

Dana  TEurope  entidre,  les  rentes  4^^  qui  ont  ete  creees  en 
rcmplacement  de  rentes  b%  sont  au  pair  ct  mSme  au-dessus, 
ou  ont  dte  echangees  centre  du  ^^  ou  du  8%. 

Des  fonds  etrangers,  exotiques,  comme  Ton  dit  en  Bourse, 
arrivent  maintenant  au  taux  moyen  auquel  se  negociaicnt 
anciennement  de  bona  credits  europecns  de  second  ordre. 
Leg  cotes  anglaises  nous  donnent  &  cet  egard,  de  curieux 
exemples. 

n  y  a  dix  ana  seulement,  void,  notamment,  le  7^  Japonais 
qui  valait  100  fr.  fin  1876  et  qui  maintenant  vaut  118 ;  & 


.  i> , 


i  .^ 


m->^ 


'  t' 


if 


t   I 


460  ECONOMIC  HISTORY. 

pareille  date,le  6%  Argentin  1868,  cot^  aujourd^hui  101  h  102, 
valait  60;  \e  5%  Brdsilien  valait,  (in  1876,87  k  88;  il  est 
maintenant  h  103,  trois  points  au-dcssus  du  pair. 

Lc  5%  Italien  qui  ne  donnc  net  que  434,  valait,  fin  18C7,  "2 
fr. :  il  dtait  dans  ces  dernicrs  temps  k  102  fr.  et  memc  au- 
dessus,  c'cst-iVdire  20  fr.  plus  cher  que  le  prix  auquel  nous 
^mettions  en  1871  notre  rente  fran^aisc  5%. 

Le  5%  Roumaii.,  qui  valait  40  fr.  fin  1876,  et  qui  rapportait 
consdqueminent  8^,  se  ndgocie  au-dessus  de  90.  On  lvalue 
done  aujourd'hui  le  credit  de  la  Roumanie  k  un  taux  bien 
supdrieur  k  eelui  auquel  notre  propre  credit  dtait  estimd  en 
1871  et  1872,  puisque,  dans  ces  deux  anndes,  la  France 
4mettait  ses  rentes  5%  k  82,50  et  84  fr.  50. 

La  rente  Autrichienne  4%  or,  cotde  89  k  90  fr.  et  qui,  il  ya 
peu  de  temps,  s'est  ndgocide  meme  k  96  et  97  fr.,  est  encore 
plus  haut  que  nos  rentes  fran^aises  en  1871.  La  rente  Hon- 
groise  4^  or,  a  valu  jusqu'^  88  dans  ces  derniers  mois,  alnrs 
que  nous  avons  drais  du  5%  fran^ais  5  et  6  francs  pins  has. 

Voici,  pour  les  principaux  fonds  d'Etats,  la  diflfdrcnce  dcs 
cours  cotds  au  31  ddccmbre,  1869,  et  au  31  ddcembre,  1886 : — 

81  dee,  1869.  81  d^e,  1886. 

3%Fran(;>ai8 70,06  82.20 

4,.34  Italien 67,30  101,86 

6%  Ame'ricain 84  134         (le  4%). 

4i  Beige 102^  96,40    (le3%). 

6%Ru8«el862 86  06 

8%  Consolid^a  anglais 92^  101^ 


v.  — MODES  DEMISSION  ET  TYPES  DE  RENTES  EMPLOYfeS 
PAR  LES  GOUVERNEMENTS  EMPRUNTEURS. 


!  V 


Nous  venons  de  montrer  comment  les  conversions  de  rentes 
effectudes  par  les  principaux  Etats  avaient  dtd  r<)ali8<^es  et 
comment  la  baisse  du  taux  de  I'intdrSt  et  I'abondance  dis 
capitaux  avaient  fncilitd  ces  operations.  II  n'est  pas  sans 
utility  de  faire  remarquer  aussi  comment  les  divers  pays 
effectuent  leurs  emprunts.  On  voit,  d'aprds  cette  <5tii(ie 
comparative  des  dettes  europdennes,  combien  est  varido  la 
diversity  des  types  de  rentes  dmises.    L'Angleterre  a  du  3^ci 


LES  DETTES  PUBLIQUES. 


461 


da  ^'fei  <lc8  aunuit^s  tcrminables ;  TAutriclie,  du  4.20^  m^- 
talliquc,  du  4^  or,  ^  5%  papier,  du  5^  argent,  des  lots  h 
primes  sans  int^rSts  .ja  Belgique  a  eu  du  4^,  du  4%,  du  8^. 
La  Russie  a  dmis  d  emprunts  sous  forme  de  rentes  6^,  5^, 
4^ ;  la  HoUande  a  des  rentes  3|,  3%,  2]^^  ;  I'ltalie  a  du  5%, 
du  3'}^,  et  vient  de  d^crdter  du  4^^  ;  la  Norwdge  a  du  4^,du 
\(^,  du  ^%  ;  le  Portugal  a  du  5%  et  du  d%  ;  la  Prusse  a  du  4^ 
etdu3^%;  laRoumanieadu7^,du69^,du59g;  Ia8axe,du3^ 
etdu3%;  laSuede,du4J%,  du4%,du3i%  ;  le  Wurtemborg, 
du  4^,  du  4^,  du  3^^,  etc.  Parmi  les  fonds  colouiauz,  nous 
trouvons  du  5%  de  la  Nouvelle  Z<$lande,  du  5^  Quebec,  du 
6^  Queensland,  du  4^,  4%  et  3^%  des  Inde8,du  4%  du  Canada, 
dc  la  Jamaique,  de  Tasmanie,  du  b%,  4^%,  4^  Victoria. 
Quel  cnseignement  tirer  de  ces  faits?  C'est  qu'on  ne  pent 
dire  d'unc  fa9on  absolue,  c'est  qu'il  n'est  pas  scientifiquement 
ni  pratiqucmcnt  prouvd  qu'il  soit  prdfdrable  pour  un  Etat  de 
n'emprunter  que  sous  un  mSme  type  de  rentes,  et  que  la 
diversity  de  ces  types  de  rentes  pent  nuire  h  leur  plus-value. 
La  \-6vit6  est  qu'il  en  est  des  Etats  comme  des  particuliers :  le 
meiilcur  mode  d'emprunt  est  celui  qui  cofite  le  moins  cher  et 
procure  la  plus  grande  somme  des  capitaux.  II  peut  Strc 
ntile  d'emprunter  sous  forme  d'obligations  ou  sous  forme  de 
rentes;  en  4%  ou  en  3%  ;  en  5%  ou  en  4^^.  C'est  une 
question  d'opportunitd  et  d'apprdciation.  Tons  les  gouverne- 
ments  out  choisi  la  forme  d'emprunt  la  plus  avantageuse  aux 
int^rets  de  tons,  sans  s'astreindre  k  n'dmettre  qu'un  type  de 
rentes  ddtermind  k  I'avancc. 

II  en  est  de  meme  pour  le  mode  d'dmission  des  emprunts. 
C'est  la  France  qui,  lors  de  la  guerre  de  Crimde,  gdndralisa  le 
s}  Sterne  des  souscriptions  publiques.  Avant  1852  les  em- 
prunts d'Etat  dtaient  soumissionnds  par  de  grandcs  maisons 
de  banque  qui  plaqaient  ensuite  les  titres  de  rentes  dans 
leur  clientele:  plus  tard,  les  gouverncmcnts  fircnt  appcl 
directemcnt  aux  capitaux  du  public  sans  se  servir  de 
rinterm6diaire  des  banquiers.  Cependant,  des  modifications 
s^rieuses  se  sent  produites  dans  le  systdme  des  souscrip- 
tions. Nous  Toyons  I'Angleterre  pour  ses  emprunts  coloniaux, 
\mr  SOS  emprunts  de  villes,  effectuer  des  appels  au  credit 


\m 


!  'IS  f 


S.I.. 


mm 


I; 


iW 


%\^ 


462 


ECONOMIC  HISTORY. 


'Ml 

m 

1 1 


'.';  ^ 


sous  fcrme  d*ad judication  publique.  Elle  offre  i%  d'int^ret, 
par  exemple ;  elle  s'engage  k  servir  d'abord  les  demandes  de 
ceux  qui  se  contentent  d'un  int^rSt  moiudre.  Ce  systeme 
favorise  les  souscripteurs  les  moins  ezigeants,  ne  d^courage 
pas  le  public  par  des  mdcomptes  imm^rit^s  &  la  repo^rtition  et 
permet  k  Teinprunteur  d'obtenir  les  conditions  les  plus  favor- 
ables;  ce  genre  de  souscriptiou  rsud  les  emprunts  moius 
or^reux  pour  les  emprunteurs.  Les  autres  modes  d'emprunU 
employes  par  les  gouvernements  sont  des  rentes  fermes  ou  \ 
option  k  des  banquiers  et  h  des  ^tablissements  de  credit, 
Plusieurs  £tats  se  sont  born^s  fi  charger  des  maisons  de 
bauque  d'^mettre  les  emprunts  qu'ils  ddsiraient  effectuer, 
moyonnant  une  commission.  A  Texception  de  TAnglcterre 
et  de  la  France,  presque  tous  les  gouvernements  europ^ens 
traitent  encore  avec  des  syndicats  de  banquiers  pour  km 
Amissions. 


i  I 


<  I 


Alt 


VI.— DE  LA  REPARTITION   DES    FONDS    PUBLICS  STRANGERS 
DANS  LES  PORTEFEUILLES  FKANgAIS. 

Dans  le  cours  de  cette  ^tude,  nous  avons  essay^  de  connaitre 
le  montant  approximatif  des  valours  dtrangdres  appartenaot 
k  nos  nationaux.  Les  chiffres  que  nous  avons  cities  nou8 
ont  ^t^  donnds  par  les  ministres  des  finances  et  les  directeurs 
de  statistique  des  gouvernements  strangers ;  mais  lis  auraient 
besoin  d'etre  compl^t^s,  et  aucune  autorit^  ne  pourrait  mieux 
que  notre  conseil  sup^rieur  de  statistique  obtenir  et  grouper 
des  indications  plus  nombreuses  sur  ce  sujet  important. 

A  de  rares  exceptions  prds,  et  sauf  des  circonstances  particu- 
litres  telles  que  la  hausse  ou  la  balsse  du  prix  du  change  sur 
des  valeurs  internationales,  les  capitalistes  fran^ais  qui  pos- 
s^dent  des  valeurs  dtrangdres  ne  font  pas  recevoir  le  montant 
de  leurs  coupons  d'intdret  k  I'dtranger :  ils  s'adrcssent  I  des 
banquiers  et  des  dtablissemeuts  de  credit  fran^ais,  pour 
encaisser  leurs  coupons  debus. 

Nous  sommes  convaincus  que  MM.  de  Rothschild,  la  Banque 
de  Paris,  la  Socidtd  Gdndrale,  le  Comptoir  d'Escorapte,  le 
Credit  Lyonnais,  le  Credit  industriel  et  tous  les  banquiers- 1 


LES  DETTES  PUBLIQUES. 


468 


Sre  4%  d'int4ret, 
les  demandes  de 
Ire.    Ge  systeme 
its,  ne  d^courage 
^  la  repartition  et 
)n8  les  plus  favor- 
emprunts  moius 
modes  d'empruntg 
entes  fermcs  ou  ^ 
ements  de  credit. 
r  dcs  maisons  de 
Ssiraicnt  effectuer, 
m  de  TAngleterre 
aements  europ^ens 
nquiers  pour  leurs 


JBLICS  fcTRANGERS 
lANgAlS. 

essay^  de  connaitre 
.ngfires  appartenant 
8  avons  cit^s  nous 
jes  et  les  directeurs 
B ;  mais  ils  auraient 
S  ne  pourrait  mieuJ 
obtenir  et  grouper 
jet  important. 
Irconstancea  particu- 
prix  du  change  sur 
|s  fran^ais  qui  F 
recevoir  le  montant 
[Is  s'adrcssent  Ues 
[^dit  fran^ais,  pouf 


qai  patent  une  patente  sp^ciale  comme  effectuant  des  paie- 
ments  de  coupons  strangers,  —  r^poudraient  sans  difficult^s  ^ 
un  questionnaire  que  le  Conseil  sup^rieur  de  statistique  leur 
adresserait. 

Ge  n'cst  pas  par  simple  curiosity  que  des  documents 
gemblables  auraient  besoin  d*Stre  mis  au  jour.  Les  questions 
financidres  et  fiscales  doiveut,  plus  que  jamais,  prendre  le  pas 
sur  Ic^  questions  politiques.  Or,  oe  que  nos  l^gislateurs  et  la 
plupart  de  nos  hommes  politiques  connaissent  le  moins,  c'est 
i'exacte  situation  de  la  fortune  publique  de  la  France,  le 
montant  et  la  puissance  de  son  ^pargne,  la  nature  et  le  cbiffre 
de  ses  placements  soit  sur  des  valours  f  ran9aises,  soit  sur  des 
valeurs  dtrangdres.  G'est  &  ce  ddfaut  de  connaissances  qu'il 
faut  attribuer,  pour  beaucoup,  les  orreurs  fiscales  ^conomiques 
et  f]nanci(>res  qui  ont  ^t^  commises  dans  I'dtablissement, 
raugmcutation  et  la  suppression  de  tel  ou  tel  impdt  de 
pr^f^Tcncc  ^  tel  ou  tel  autre.  A  une  ^poque  ou  il  est  ques- 
tion (I'impdt  sur  les  rentes,  dMmp6t  sur  les  valeurs  ^traugdres 
appartenant  ^  des  Frangais,  d'impdt  sur  le  revenu,  etc.,  ces 
reuscigncments  sont  indispcnsables  si  Ton  veut  dviter  de  dan- 
gereuses  crreurs.  Le  Conseil  sup^rieur  ne  doit  pas  h^siter,  ik 
Dotre  avis,  ^  faire  la  lumidre  sur  ces  questions  sp^ciales :  c'est 
du  cote  dcs  statistiques  financidres,  nous  ne  saurions  trop  in- 
sistcr  sur  cc  point,  que  doivent  porter  les  efforts  et  les  travaux 
des  hommes  dmineuts  qui  font  partio  de  la  Commission. 


VII. -DE  LA  COTE  ET  DE  LA  NftGOCIATION  DES  RENTES 
FRANgAISES  AUX  BOURSES  ^TRANG^IRES. 

Nous  dcvons  aussi  signaler  une  r^formc  que  nous  avons 
bien  souvcnt  r^clam^e  et  qui  parattra  sans  doute  utile  & 
obtenir  quand  on  se  sera  rendu  compte  de  I'importance  des 
emprunts  dtrangers  contractus  en  France.  A  I'exception  des 
fouds  allcmands,  tous  les  fonds  d'etat  strangers,  toutes  les 
principalcs  valeurs  ^trangdres  sont  cot^s  ^  notre  bourse ;  tous 
lo8  gouvcrncments  strangers  ont  fait  appel  aux  capitaux  fran- 
^ais.  Or,  aucuue  de  nos  rentes  fran^aises  n'est  cot^e  ni  ^  Vi- 
enne,  ni  h.  Saint-P^tcrsbourg,  ni  ^  Stockolm,  ni  &  Christiania, 


iff 


I? 


;:-i 


in 

14.'  -J* 

i 

iiii 


S«*^ 


464 


ECONOMIC  HISTORY. 


ni  &  Rome,  ni  k  Florence,  ni  k  Madrid,  ni  k  Lisbonne,  ni  k  Atb- 
dnes.  Notre  8^  est  cot^  h  Londres,  Bruxelles,  et  Amsterdam. 
Et  c'est  tout    Gette  situation  m^rite  qu'on  y  porte  attcution. 

L'afflueuce  des  fonds  d'Etat  strangers  sur  le  march<? 
fran^ais,  la  facility  avec  laquelle  ils  s'y  placent  et  8*y  nego- 
cient,  sont  des  faits  financiers  qui  rdvdlent  une  tendance  des 
capitaux  contre  laquelle  il  serait  peut-Stre  k  la  fois  tr^s 
difficile  de  tenter  une  reaction  soudaine  et  violente. 

II  est  certainement  regrettable  que  nos  nationaux  dcviennent 
les  cr^anciers  d'Etats  dont  la  solvabilitd  et  le  credit  sont 
douteux.  II  est  non  moins  f&cheux  qu'aux  capitaux  Icnte- 
ment  formds  par  les  hommes  d'dpargne  de  notre  pays  se  sub- 
stituent  des  titrcs  strangers  ddpourvus  de  garautie  s<!rieuse. 

Mais,  d'autrc  part,  il  ne  saurait  6tre  mauvais  et  il  est  memc 
udcessaire  et  utile,  au  point  de  vue  financier  et  dconomiquc, 
que  les  nations  honnetes  et  notoiremeut  solvables  soieut 
ddbitrices  de  la  n6tre.  II  ne  saurait  §tre  mauvais  qu'kun 
moment  donud  il  y  ait  entre  les  mains  des  capitalistes  fran9ai8 
une  certaine  quantity  de  bon  papier  stranger,  bien  et  dument 
garanti,  et  facilement  realisable. 

On  con^oit  cependant  qu'il  y  a  un  certain  dquilibre  financier 
international  que  ne  saurait  §tre  rompu  sans  inconvdiiient.  On 
conceit  le  pdril  qu'il  y  aurait  pour  la  France  h  ne  compter  au 
dehors  que  des  ddbiteurs  et  point  de  crdanciers,  h  tuujours 
absorber  le  papier  et  ne  jamais  en  odder,  k  se  saturcr  de 
valours  dtrangdres  tandis  qu'elle  ne  placerait  point  dans  les 
autres  pays  une  quantity  k  peu  prds  dquivalente  de  valeurs 
fran^aises.  On  pent  enfin  mesurer  le  danger  que  notre  pays 
pourrait  courir  le  jour  oh  les  nations  qui  nous  entourent 
gagneraient  plus  h  notre  ruine  qu*^  notre  prospdritd.  Meme 
au  point  de  vue  politique,  ces  considdrations  ne  sont  pas  sans 
consistanco. 

Politiquement,  aussi  bien  que  financidrement,  il  est  done 
sage  et  ddsirable  d'intdresser  I'Europe  k  nos  progrds,  k  notre 
ddveloppement  national,  k  notre  avenir  dconomique. 

Un  des  moyens  les  plus  efficaces  d'atteindre  ce  but  est  de 
placer  parmi  les  capitalistes  dtrangers  la  plus  grande  quantity 
possible  de  rentes  et  de  valeurs  franfaises. 


LES  DETTES  PUBLIQUES. 


466 


Mais,  dira-t-on,  cettc  expansion  des  titres  fran^ais  s'op^rera 
naturcllciucnt,  grfice  &  la  confiance  si  grande  que  le  credit  de 
la  Franco  inspire  aiix  autres  peuples.  Si  bicn  quMl  u*y  aurait 
qii'^  laisscr  fairc  au  temps,  aux  capitaux  strangers  ct  k  la 
sagcssc  des  nations  pour  assurer  un  rdsultat  si  souliaitable 
jwur  notre  avenir. 

Cc  raisonnenicnt  est  d'une  logiquc  exccllcnte,  et  peut  pa- 
raitre  ties  solidemcnt  fond^  en  th^orie.  II  est  absolumcnt 
Tain,  s'il  n'cst  pas  justifid  par  la  pratique.  Or,  il  ne  Test 
malheureuscment  pas. 

Ce  n'cst  pas  tout  de  dire  aux  autres  nations  :  *'  Moi,  France, 
j'^mcts  dc  la  rente,  oiTrant  toutcs  garanties,  pleine  sdcurit^. 
Prencz-la ;  il  n'y  a  ricn  de  mcilleur.  Vous  connaissez  ma 
richcsse,  ma  puissance  de  production,  mon  amour  du  travail, 
ma  probity  rcconnue.  Vous  savez  que  j'ai  toujours  pay€  et 
bien  payd ;  vous  savez  combien,  meme  dans  les  circonstances 
les  plus  critiques,  j'ai  dtd  ponctuelle  k  remplir  mes  engage- 
ments. Prenez  de  ma  rente !  Quels  meilleurs  titres  avez- 
Tous  chez  vous  ?  Quels  meilleurs  placements  ?  Quel  emploi 
plus  productif  et  plus  sur  ?  " 

Uu  tel  discours  n'aurait  rien  que  de  juste  et  d'exact.  Tout 
le  monde  est  p^n^trd  de  ces  v^rit^s  et  nous  n'aurions  k  prScher 
que  des  convertis. 

Mais,  pour  que  T^tranger  prenne  beaucoup  de  nos  fonds 
d'Etat,  encore  faut-il  qu'il  sache  oik  aller  les  prendre,  oh  aller 
les  achetcr,  et  meme  o&  aller  les  vendre,  le  besoin  dch^ant.  II 
faut  Ics  rend  re  accessibles  k  tons  les  capitalistes  de  T  Europe, 
et  n^ociables  facilement  partout. 

Or,  c'est  ce  dont  on  ne  nous  paratt  pas  s'Stre  suffisamment 
occupy. 

Comme  nous  Tayons  dit  plus  haut,  nos  rentes  fran^aises  ne 
sont  pas  cot^es  aux  bourses  ^trangSres.  Dans  ces  dernidres 
ann^es,  dc  grands  emprunts  ont  ^t^  effectuds  chez  nous  notam- 
meut  en  rente  3%  amortissable.  On  peut  dire  qu'^  Theure 
oik  nous  sommos,  cette  rento  est  presque  inconnue  sur  les 
grandes  places  financidres  de  TEurope.  II  y  a  1^  une  faute 
commise,  une  grave  ndgligence  qu'il  faut  se  h&ter  de  r^parer. 
On  doit  faire  pour  nos  rentes  ce  que  les  autres  nations  font 

ao 


I 


» ', 


^(* 


lf,t,l* 


466 


ECONOMIC  HISTORY. 


pour  leurs  fonds  d*£tat  qu'elles  prennent  tant  de  aoin  de  nous 
fairo  connaitro  et  auquols  elles  ouvreut  accda  sur  tous  leg 
grands  marcb^s  europdens. 


VIU.— GUERRE,  RUINE,  OU  REVOLUTION  INDUSTRIELLE  ET 

I:C0N0M1QUE. 

Mais  ce  qui,  k  notro  avis,  ressort  jusqu'^  rdvidciicc  du  tra- 
vail auquel  nous  nous  sommes  livr^s,  c'cst  que   I'Europc' 
entidre,  avcc  Ic  poids  de  scs  ddpcnscs  militaircs,  avcc  la  kui- 
charge  des  dcttes  publiques  et  d'iinpdts  qui  I'dcrascnt,  marclic, 
si  elle  pcrsdvdrc  dans  cette  voie,  k  la  guerre,  h  la  mine,  h  uue 
veritable  revolution  industrielle  et  deonomiquc.    Quel  que 
soit  le  pessimisme  d'uue  telle  conclusion,  nous  nc  pourons 
taire  nos  imprcssious.     La  paix  de  I'Europe  n*est,  h  vrai  dire, 
qu'un  dtat  de  guerre  latent,  et  cette  situation  qui  scinblc  la 
condition  ordinaire  du  vieux  continent  pdse  dc  deux  inaniereD 
sur  le  mondc  civilisd :  elle  lui  enldve,  d'une  part,  uiio  bonne 
partie  des  capitaux  constituds  par  Pdpargne  annucllc,  par  Ic 
travail  de  tous,  pour  entretcuir  des  soldats,  acbetcr  des  fusils, 
des  canons,  des  munitions,  construire  des  fortcresscs,  des 
navires  ;  d'autre  part,  elle  I'empecbe  de  se  servir  de  ces  capi- 
taux  dnormes  pour  ddveloppcr  le  commerce,  I'industric,  le 
matdriel  de  la  production,  diminuer  les  frais  gdndraiix  de  la 
nation.    L'apprdhension  et  les  prdparatifs  de  guerre  devienncnt 
aussi  nuisibles  et  aussi  couteux  que  la  guerre  elle-meme.  Les 
finances  de  I'Europe  sont  tellement  obdrdes  qu'on  peut  craindre 
qu'elles  ne  conduisent  fatalement  les  gouvernements  h  se  de- 
mander  si  la  guerre,  avcc  ses  dventualitds  terrlblcs,  ne  doit 
pas  §tre  prdfdrde  au  maintien  d'une  paix  prdcaire  et  couteuse. 
Si  ce  n'est  point  h  la  guerre  que  doivent  aboutir  les  prdpara- 
tifs militaires  et  les  armements  de  I'Europe,  ce  pourrait  bien 
Stre,  ainsi  que  le  disait,  il  y  a  vingt  ans,  lord  Stanley,  ^  "la 
banqueroute  des  fitats."    Si  ce  n'est  ni  ^  la  guerre  niila 
mine  que  doivent  conduire  de  semblables  folies,  e'est  assurf 
ment  h  une  rdvolution  industrielle  et  dconomique. 

La  vieille  Europe  lutte'contre  la  concurrence  de  pays  jeunes, 
riches,  produisant  h  meilleur    compte.    II  est,  au-deli  de 


t  h 


LES  DETTES  PUBLIQUES. 


467 


INDUSTKIELLE  ET 


nous  nc  pouvoiis 


rOc^an,  une  r^publique  puissante,  PAm^rique,  qui  a  su 
^teindre  une  dette  que  lea  ndcessit^a  d'uno  grando  cause  lui 
avaient  fait  contracter  ;  elle  ofiFre  au  monde  entier  le  spectacle 
d'uiie  prosp^rit^  sans  exemple.  Tout  r^cemment,  le  message 
du  president  Cleveland  &  I'ouverture  du  Gongrds  a  traduit  le 
sentiment  d'un  veritable  embarras  de  richesses.  En  Asie, 
tous  les  peuples  cominencent  k  profitcr  des  ddcouvertes  et  dos 
progr^s  que  TEurope  a  accomplis,  et  comme  dans  ces  pays  le 
prix  do  la  main-d'oeuvre  et  les  charges  publiques  sont  presque 
nuls,  TEurope  entidre  ^prouvera  chaquo  annde,  do  plus  eu 
plus,  Ics  efTets  de  Tapparition  sur  la  scdne  conimerciale  ct 
induytriclle,  de  tous  ces  peuples  qui  n*ont  pas  k  payer,  tous  lea 
ans,  ni  quatre  milliards  ct  demi  pour  Ics  ddpensos  de  la  guerre, 
ni  plus  de  cinq  milliards  pour  les  int<$rets  de  leurs  dettes 
publiques. 

Le  mardchal  de  Moltke  disait  rdcemment  au  Reichstag 
"qu'^la  longue  les  peuples  ne  pourront  plus  supporter  les 
charges  militaires."  II  aurait  pu  ajouter  que  le  jour  oil  les 
peuples  se  rendront  compte  de  tout  ce  que  leur  coute  la  guerre, 
mSme  lorsqu'elle  demeure  k  I'd  tat  de  simple  risque,  lorsquMls 
considdreront  la  masse  croissante  d'intdruts  que  le  progrds 
jette  chaque  jour  du  cdtd  de  la  paix,  les  gouvcrnds  sauront  ce 
jour-l(\  dieter  Icurs  volontds  k  leurs  gouvernants.  Les  41 
milliards  d'augmentation  des  dettes  publiques  de  I'Europe, 
depuis  1870,  mis  en  regard  des  milliards  dc  diminution  de  la 
dette  dc  I'Amdrique  offrent  un  puissant  enseignemont.  Non, 
les  peuples  ne  pourront  plus  k  la  longue  supporter  de  tels 
fardoaux  ;  nun,  ils  ne  pourront  plus  continncr  k  travailler,  k 
peinor,  a  souffrir,  k  dlever  pdniblemcnt  leurs  families  pour 
que  leurs  biens,  leurs  ressources,  leurs  dpargncs,  les  ctres  qui 
leurs  sont  chers,  soient  sacrifids  et  ddtruits  par  la  guerre  dans 
des  luttes  gigantcsques.  lis  veulent  la  paix,  profiter  des 
bienfaits  qu'elle  procure,  dchangcr  paisiblcmcnt  leurs  produits, 
commcrcer,  travailler;  ils  veulent  tous  une  administration 
^conome,  des  diminutions  d'impdts. 

A  cos  ddsirs,  Ics  gouvernements  rdpondent  en  augmentant 
tous  les  ans  les  charges  militaires,  les  prdparatifs  de  guerre, 
les  charges  publiques. 


n 


:    S 


468 


ECONOMIC  HISTORY. 


m 


I 
't 

i. 


m 


Les  peuples  finiront  par  se  latter  du  maiiitien  d'un  tel  ^tAt 
do  ohoset  qui  noiia  ramdne  aux  tempt  barbarca :  la  civiliHation 
qui  a  abattu  let  barridret  entre  let  payt  et  lot  individus,  rendu 
les  comuuications  plut  rapidet  et  plut  facilet,  ^tubli  dcs 
chemint  do  for  et  dot  routot,  creut^  dot  canaux,  pcrc^  des 
montagnet  et  det  itthmet,  impotera  la  paix  aux  socidt^o 
modernes  d'uno  fa^on  autti  irrdtittible  que  la  guerro  s'im- 
posait  aux  tauvaget  et  aux  tooidt^t  ancienues.  —  Janvier, 
1887. 


.'  * 


V     / 


•Vt  ^\ 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


469 


XVII. 

THE  WORLD'S  PROGRESS  IN  TRADE  AND 
INDUSTRY. 


From  Nkumann-Spallart's  **  Uebrrsichten  der  Weltwirtr- 
scnakt,"'  tran8latrd*  in  the  ''journal  of  the  statistical 
SociKTY,"   Vol.  XLV.  pp.  82-114. 

THE  latter  part  of  the  present  century  has  witnessed 
many  changes  in  the  economic  and  industrial  condi- 
tions of  the  majority  of  the  civilized  countries  of  the  world. 
IndiKstrics,  arts,  and  manufactures  have  acquired  a  remark- 
able development ;  the  more  striking  when  we  consider  how 
ra|iidly  the  change  has  been  effected.  The  progress  made  by 
imlividual  States  is  easily  traced  by  their  degree  of  refinement 
and  a  study  of  their  statistics;  and  from  these  it  will  be  seen 
how  ({uickly  this  transformation  advances.  Little  less  than 
a  century  ago  the  industries  of  certain  countries  and  States 
were  isolated  and  estranged ;  at  the  present  time  they  are  to 
a  great  extent  united.  It  is  not  so  long  since  that  burden- 
some restraints  were  placed  upon  internal  intercourse  by 
reason  of  monopolies  which  were  in  the  hands  of  guilds  and 
corporations.  In  addition  to  this,  staple  rights  and  traffic 
riirhts,  privileges  which  were  granted  to  certain  townships, 
had  also  the  effect  of  restricting  the  progress  of  national, 
and  in  a  far  greater  degree  of  individual,  industries  »nd 
trades.  In  some  of  the  central  European  countries  this  state 
of  affairs  continued  until  very  recently,  and  even  when  the 
horizon  gradually  began  to  widen  among  some  of  the  more 
enlightened  nations,  this  isolation  still  continued,  though 
within  extended  boundaries.     It  was,  however,  not  so  much 

'  Jahrgan?,  1880,  Stuttgart.    Julius  Maier,  1881. 

-  The  edition  of  tlie  "  Ueberniehten "  for  1887  hai  neceMitated  a  number 
"fi^lianges  in  ttiis  translation.  —  B.  R. 


470 


ECONOMIC  HISTORY. 


an  isolation  of  town  from  town  as  province  from  province, 
and  many  European  countries  formed  the  type  of  a  narrow 
minded  policy  of  seclusion  in  their  economic  life.     It  wag 
only  during  the  decade  from  1870  to  1880  that  those  admin- 
istrative reforms  were  introduced  which  had  the  effect  of 
causing  the  whole  State  to  be  recognized  as  a  unit  in  respect 
of  economic  questions  affecting  the  entire  population.    Soon 
after  this  important  epoch  in  the  history  of  economic  pro- 
gress, people  became  more  sensible  of  the  pressing  need  that 
existed  of  freeing  commerce  throughout  the  land  from  the 
burdensome  restraints  which  had  hitherto  fettered  it.    As 
soon  as  the  political  horizon  began  to  clear,  the  German  States 
banded  together  and  formed  the  Zollverein.     Great  Britain 
then  proceeded  to  abolish  protective  tariffs ;  the  continental 
States  also,  after  a  little  time,  reduced  the  existing  high 
duties,  repealed  the  guild  and  corporation  laws,  which  until 
then  had  so  paralyzed  trade,  and  endeavored  to  enter  into  a 
species  of  political  trades  union  with  each  other.     It  was 
not  long  before  the  European  Governments,  following  the 
example  set  them  by  England  and  France  in  1860,  concluded 
a  series  of  international  commercial  treaties,  by  which  thej 
reciprocally  guaranteed  to  each  other  "  most  favored  "  treat- 
ment ;  and  the  subsequent  modifications  of  the  treaties  thus 
contracted  in  the  period  1860-68  were  generally  in  a  favor- 
able direction,  and  tended  to  minimize  the  domain  of  cus- 
toms' exclusion. 

After  the  expiration  of  the  treaty-period  in  1877  we  enter 
again  upon  a  time  of  economic  retrogression.  The  treaties 
during  later  years  were  not  collectively  renewed,  and  although 
in  some  cases  the  duties  had  been  raised,  yet  there  was  m 
actual  return  to  the  old  system  of  restrictive  and  prohibitive 
tariffs.  The  force  of  circumstances  imperatively  demands  that 
commercial  relations  should  remain  undisturbed,  and  not  suf- 
fer from  restraints  placed  upon  free  importation  into  the  re- 
spective countries,  fn  connection  with  the  close  economic 
combinations  of  all  civilized  nations,  there  has  in  our  time 
been  an  increasing  effort  to  attain  a  similarity  of  conditions 
with  reference  to  industry,  justice,  and  administration.  Tlie 


PROGRESS  m  TRADE  AND  INDUSTRY. 


471 


je  from  province, 
type  of  a  narrow 
mic  life.  It  wag 
that  those  admin- 
had  the  effect  of 
}  a  unit  in  respect 
population.  Soon 
r  of  economic  pro- 
pressing  need  that 
the  land  from  the 

0  fettered  it.    As 
the  German  States 

in.  Great  Britain 
l8 ;  the  continental 
the  existing  high 
a  laws,  vrhich  until 
ored  to  enter  into  a 
ich  other.  It  was 
juts,  following  the 

1  in  1860,  concluded 
ities,  by  which  they 
.ost  favored  "  treat- 
of  the  treaties  thus 

nerally  in  a  favor- 
the  domain  of  cus- 

od  in  1877  we  enter 
Ision.     The  treaties 
.lewed,  and  although 
[d,  yet  there  was  no 
iive  and  prohibitive 
Ltively  demands  that 
jturbed,  andnotsul- 
^rtation  into  the  re- 
the  close  economic 
.re  has  in  our  time 
[ilarity  of  conditions 
Iministration.  The 


unity  of  the  most  complex  State  relationships  depends  on  the 
contents  of  numerous  economic  treaties.    At  first  in  Germany, 
and  afterward  in  certain  other  European  States,  railroad  or- 
ganizations were  formed.      By  means  of  these  enterprises 
goods  and  personal  property  were  transported  throughout  the 
whole  length  and  breadth  of  the  land.     Even  in  a  far  greater 
degree  than  railways,  have  the  postal  and  telegraphic  systems 
been  the  means  of  uniting  not  only  the  State  but  the  entire 
world,  and  of  making  people  of  all  nations  neighbors  in  spite 
of  distance.     The  world's  postal  union,  which  extends  nearly 
1,300,000  square  miles,  and  unites  approximately  760  mil- 
lions of  people,  is  one  of  the  happiest  results  of  the  develop- 
ment of  commercial  industries.     In  the  same  way,  in  1865, 
the  first  steps  were  taken  to  establish  an  international  tele- 
graphic union,  and  the  results  in  1880  went  far  to  prove  that 
this  union  had  been  the  means  of  breaking  down  the  barriers 
of  international    commercial    intercourse.      Railway  con- 
gresses, assemblies  of  a  thoroughly  cosmopolitan  character, 
the  postal  congress,  and  the  international  telegraphic  confer- 
ence,— all  enjoying  official  authority, —  have  been  the  means 
Oi  extending  still  further  commercial  relations.     What  they 
accomplish  in  the  region  of  intellectual  and  material  culture 
is  recorded  in  golden  characters  in  the  history  of  the  world. 
They  have  proved,  in  a  far  greater  degree  than  was  antici- 
pated, the  means  of  promoting  still  further  advancement  in 
the  economic  conditions  of  the  world.     To  them  we  owe  the 
unity  of  the  weights  and  measures  on  the  basis  of  the  metri- 
cal system,  the  international  system  of  goods  transportation, 
and  the  adoption  by  entire  groups  of  States  of  the  same 
monetary  standard,  of  which  we  have  an  example,  first,  in 
the  Austro-German  monetary  conference,  then  in  the  con- 
ference of  1865,  known  as  the  Great  Latin  Conference,  and 
lastly  in  the  Scandinavian  monetary  union.     The  adoption 
of  a  complete  international  system  of  weights  and  measures 
is  a  question  the  settlement  of  which  cannot  be  long  de- 
ferred; the  only  point  upon  which  controversy  is  likely  to 
arise  is  the  settlement  of  the  basis  which  is  to  be  taken. 
There  has  already  been  established  a  similarity  in  the  inter- 


% 


472 


ECONOMIC  HISTORY. 


national  laws  of  banking  and  exchange.  This  has  been  the 
means  of  affording  greater  security  for  the  protection  of  in- 
ternational rights,  and  given  also  an  impetus  to  the  distri- 
bution of  capital.  As  may  be  easily  credited,  at  no  period 
of  the  world's  history  has  there  been  a  time  when  the  rapid 
circulation  of  capital  between  one  nation  and  another  has 
been  more  easily  and  expeditiously  effected  than  at  present. 
The  movement  of  milliards  now  occasions  no  surprise,  and  it 
is  perfectly  consistent  that  in  the  case  of  English  or  French 
capital  which  circulates  in  Austria,  Germany,  Russia, 
Egypt,  or  in  South  America,  or  Asiatic  countries,  any  ex- 
cess or  deficiency  may  be  provided  for  by  credit  drawn  on 
Europe,  in  America,  or  India.  Thus  in  the  same  May  all 
commercial  enterprises  combine  to  assist  in  the  development 
of  cosmopolitan  economy, —  railways,  posts,  and  telegraphs 
being  the  outward  sign  of  this  union.  With  these  goes  hand 
in  hand  the  division  of  labor  which  conveys  the  production 
of  the  masses  to  its  proper  place  in  the  world.  With  the 
ever-increasing  masses,  the  necessity  of  the  world's  produc- 
tion being  considerably  extended  becomes  a  matter  of  the 
first  importance,  and  there  are  now  no  barriers  sufficiently 
strong  to  resist  this  universal  demand.  Administrative  in- 
stitutions must  be  so  adapted  that  this  century's  legislation 
may  be  fixed  on  a  firm  and  lasting  basis. 

International  relations  have  had  the  effect  of  creating  a  new 
order  of  life,  in  which  the  industries  of  individual  States, 
without  detriment  to  their  independence  or  individuality, 
must  perform  their  share  of  the  functions  of  the  whole,  of 
which  they  constitute  a  unit.  The  part  then  which  in  the 
world's  economy  is  taken  by  individual  States  is  of  tlv 
greatest  value;  and  though  the  present  economic  conditions 
of  the  world  are  not  yet  fully  developed,  they  are  sufficiently 
advanced  to  enable  us  to  form  an  idea  of  their  ultimate  im- 
portance. Wonderful  progress  has  been  already  made,  and 
even  if  it  be  found  that  the  improvements  which  have  so  far 
manifested  themselves  in  these  economic  conditions  will  not 
be  further  advanced  by  the  present  generation,  still  there  can 
be  no  question  as  to  the  excellent  results  of  which  they  have 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


473 


tiia  has  been  the 
protection  of  in- 
,U8  to  the  distri- 
ed,  at  no  period 
3  when  the  rapid 
ind  another  has 
than  at  present. 
)  surprise,  and  it 
Inglish  or  French 
ermany,    Russia, 
mntrics,  any  ex- 
credit  drawn  on 
the  same  way  all 
.  the  development 
s,  and  telegraphs 
h  these  goes  hand 
tys  the  production 
vorld.     With  the 
le  world's  produc- 
1  a  matter  of  the 
rriers  sufficiently 
.dministrative  in- 
itury's  legislation 

of  creating  a  new 
Individual  States, 
or  individuality, 
of  the  whole,  of 
|hen  which  in  the 
States  is  of  tlv 
|)nomic  conditions 
jy  are  sufficiently 
Iheir  ultimate  im- 
[ready  made,  and 
rhich  have  so  far 
|>nditions  will  not 
)n,  still  there  can 
which  they  have 


already  been  productive.  In  all  parts  of  the  civilized  world 
the  growth  of  capital  has  made  rapid  progress,  and  even 
during  the  commercial  crisis  of  1873,  and  the  consequent 
depression,  this  progress,  though  certainly  interrupted,  was 
not  wholly  checked.  It  again  received  a  powerful  impulse 
in  1880-82,  and  has  by  no  means  come  to  a  standstill  in  the 
relatively  unfavorable  years  1883-85.  Adequate  employment 
for  those  accumulated  millions  has  been  possible  in  large 
economic  undertakings.  Thus,  for  instance,  when  sufficient 
profit  was  not  obtainable  in  Europe  by  reason  of  a  fall  in  the 
rates  of  interest,  capital  was  diverted  into  other  channels, 
and  employed  in  foreign  investments  in  far  distant  countries, 
which,  though  remote,  yet  offer  a  fair  field  for  investment. 
In  this  manner  inventions  and  enterprise  have  been  univer- 
sally stimulated. 

All  these  considerations  lead  us  confidently  to  predict  that 
though  there  may  be  interruptions  and  checks  to  the  ever 
increasing  progress  in  the  improvements  of  the  world's 
economic  conditions,  these  interruptions  are  of  a  purely 
temporary  character,  and  must  eventually  be  overcome.  In- 
dustries and  commerce  which  have  advanced  with  such  rapid 
strides,  and  the  vast  amount  of  labor  and  capital  which  have 
been  expended  upon  railroads,  shipping,  telegraphs,  etc., 
have  all  given  an  impetus  to  the  world's  progress,  and  can- 
not fail  to  make  a  lasting  impression  upon  it. 

In  order  thoroughly  to  appreciate  the  changes  which  the 
world's  economic  conditions  have  experienced  under  the  dif- 
ferent natural  political  and  social  influences,  as  well  as  to 
estimate  the  reaction  caused  by  crises,  or  periods  of  specu- 
liition,  favorable  or  unfavorable  harvests,  wars,  or  revolu- 
tions, protection  or  free  trade,  and  other  important  factors  in 
determining  the  national  prosperity,  it  will  be  necessary  to 
arrange  a  broad  and  comprehensive  system  of  statistics  ex- 
tending over  a  lengthened  period.  We  have  to  deal  with 
such  a  mass  of  complex  individual  elements,  that  only  the 
consideration  of  the  most  important  will  lead  us  to  any  logi- 
cal deduction.  Social  economy,  commercial  policy,  finance, 
changes  of  administration,  as  also  the  specific  influences  of 


474 


ECONOMIC  HISTORY. 


■' 


l'^' 


.V.  'TrSmJ^Sui^ 


i' 


good  or  bad  years,  must  be  taken  into  account.  In  the  in- 
vestigation of  a  subject  so  complicated  as  the  present,  we 
must  be  satisfied  with  very  crude  information,  and  as  it  is  im- 
possible to  obtain  accurate  and  reliable  data,  we  are  obliged 
to  depend  in  a  very  great  measure  upon  inference  and  deduc- 
tion. As  a  means  of  approximately  estimating  the  extent  of 
increase  or  decrease  in  material  prosperity,  it  is  advisable  to 
take  as  a  basis  for  the  calculation,  the  income-tax  returns, 
affording  as  they  do  a  certain  indication  of  the  position  of 
national  wealth. 

Among  the  nations  which  have  contributed  so  enormously  to 
increase  the  world's  prosperity,  Great  Britain  takes  the  fore- 
most place,  the  growth  of  her  national  capital  having  since  the 
commencement  of  the  present  century  made  very  rapid  strides, 
A  ref.Tence  to  the  income-tax  returns  will  show  how  great 
this  annual  increase  has  been.  Mr.  Dudley  Baxter  gives  the 
income  for  the  year  1814-15  as  146  millions  sterling  (accord- 
ing to  the  income-tax  assessments) ;  in  1843  it  amounted  to 
251  millions,  while  in  1865  it  rose  to  396  millions,  and  in 
1875  to  571  millions ;  and  according  to  the  estimates  formed 
by  one  of  the  most  distinguished  statisticians,  Mr.  Robert 
Giffen,  the  national  wealth  of  Great  Britain,  which  in  1865 
amounted  to  6,113  millions,  rose  in  1875  to  8,548  millions; 
thus  exhibiting  for  the  decennial  period  an  increase  of  2,435 
million  sterling.  Latterly,  on  account  of  the  general  depres- 
sion which  has  prevailed,  the  annual  increase  of  wealth  is 
estimated  only  at  90  millions.  Thus  the  progress  for  the  en- 
tire period  may  be  presented  in  the  following  statements  :- 


Tears. 


1800 
1840 
1800 
1876 
1880 


Authority. 


Reck  and  Pultenej 
Porter      .... 
Lenne  T^vi  .    .    . 
Giffen 


National  Wealth 


£l,8OO,000,P 

4,000,0(.10,000 

«,0(H),(100f« 

8,650,000,OOH 

about  9.000,000,000 


And  it  will  be  readily  conceded  that  the  latter  figures  are 
rather  under  than  over  estimated,  when  we  consider  the  fact 
that  the  amount  of  British  capital  invested  in  Government 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


475 


securities  and  different  companies,  in  railway  and  other  in- 
dustrial enterprises,  is  estimated  by  Mr.  Giffen,  in  his  paper 
un  the  accumulation  of  capital  in  the  United  Kingdom,  at 
2,788  millions,  and  by  the  "Banker's  Magazine"  (March, 
1881)  at  3,465  millions.  According  to  the  income-tax  re- 
turns, the  exempted  incomes  in  1845  were  at  the  rate  of  j£7, 
in  18r)5  j£ll,  and  in  1875  £17  per  head.  According  to  the 
most  recent  calculations  (1884),  however,  the  amount  is  esti- 
mated at  about  j£36  per  head  of  the  community.  These 
figures  will  show  at  what  an  extraordinary  rate  the  wealth 
of  the  country  is  increasing,  and  we  may  repeat  that  the 
estimates  are  rather  below  than  above  the  mark. 

As  regards  the  progress  of  the  national  wealth  in  France, 
it  appears  from  the  examination  of  the  data  that  the  accumu- 
lation of  capital  has  increased  in  the  period  1848-71  from 
50  to  60  per  cent.  M.  L.  Wolowski  estimated  the  national 
wealth  in  1871  at  150  to  200  milliards  of  francs,  of  which 
120  milliards  consisted  of  property  in  land  and  houses,  so 
that  this  latter  description  of  property  has  absorbed  since 
1851  about  20  milliards,  or  yearly  one  milliard  of  francs. 
This  view  of  the  national  prosperity  of  France  has  also  been 
taken  by  M.  de  Foville,  after  a  critical  examination  of  the 
estimates  formed  by  M.  Block,  S.  Mony,  A.  Amelin,  Vacher, 
and  other  well-known  writers.  He  estimates  the  national 
wealth,  after  the  loss  of  Alsace  and  Lorraine,  at  from  200 
to  216  milliards  of  francs;  these  estimates  are  also  forti- 
fied by  the  authority  of  Fehler,  who  agrees  in  the  main  with 
He  Foville  as  regards  the  increase  in  the  accumulation  of 
wealth,  which  may  be  estimated  at  1,500  millions  of  francs 
yearly. 

There  are  so  many  insurmountable  difficulties  in  the  way 
of  approximately  estimating  the  increase  in  the  national 
wealth  of  Germany,  that  a  comparative  statement  is  almost 
out  of  the  question.  The  many  political,  administrative,  and 
territorial  changes  which  of  late  years  have  taken  place,  ren- 
der it  almost  impossible  to  produce  a  comparison  between 
its  present  position  and  that  of  earlier  years;  an  idea,  how- 
ever, may  be  formed  of  the  great  progress  made  by  this  nation 


K 


n-^- 


tl 


P' 


-I- 


11,  V  i,-       '    ■" 


II :    f^:-!- 


476 


ECONOMIC  HISTORY. 


by  a  study  of  the  value  of  the  exports,  which  increased  from 
1,060  million  marks  in  the  year  1850  to  6,554  million  marks 
in  1884.  Another  method  of  arriving  at  an  approximate  idea 
of  the  increase  of  public  wealth  is  to  take  the  amount  of  duties 
levied  on  all  steam  industries.  Dr.  Engel  computes  the  actual 
assessed  capital  in  the  German  Empire  employed  in  these 
industries  at  11,104  million  of  marks.  Dr.  Soctbcer,  in  his 
valuable  work  on  the  extent  and  distribution  of  wealth,  though 
taking  a  somewhat  pessimistic  view  of  the  situation,  states 
that  in  the  kingdom  of  Prussia  alone  during  the  period 
1872-78  —  a  period  of  industrial  stagnation  —  there  was 
found  to  be  a  sensible  increase  in  the  national  wealth,  as 
the  following  table  will  show:  — 


tmn. 


1872 
187.S 

1874 
1876 
1876 
1877 
1878 


National  Income. 

Per  Kmil  of 
Population. 

Harks. 

ttarka. 

6,n69,(KK).n00 

2!I3 

7,l)t5.()00,000 

29« 

7,532,000.000 

3(17 

7,628,000,000 

311 

7,857,000,000 

316 

7,092,000,000 

315 

8,060.000,000 

823 

As  an  indication  of  the  increase  of  national  income,  if  we 
estimate  it  simply  from  the  income-tax  assessments,  it  will 
be  seen  that  the  tax-paying  income,  which  amounted  in  1854 
to  302  million  marks,  rose  in  1878  to  957  millions,  — an  in- 
crease of  300  per  cent.  It  is  evident,  therefore,  from  an 
examination  of  Soetbeer's  that  there  has  been  a  very  consid- 
erable increase  in  the  national  wealth  of  Prussia. 

The  remaining  western  European  countries  also  afford 
valuable  materials  for  researches  into  the  question  of  the 
growth  of  economic  power.  Thus  in  the  case  of  Aiistro- 
Hungary,  C.  von  Czoernig,  basing  his  calculations  upon 
various  statistical  returns,  estimates  roughly  the  income 
derivable  from  land,  mining,  and  other  industries  in  1859 
at  about  3,360  million  florins;  an  unofficial  publication 
issued  in  1868  estimates  it  at  4,300  millions  ;    and  the 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


477 


increased  from 
4  million  marks 
ipproximatc  idea 
amount  of  duties 
nputes  the  actual 
iployed  in  these 

Soetbcer,  in  his 
of  wealth,  though 

situation,  states 
uring  the  period 
tion  —  there  was 
itional  wealth,  as 


[ncome. 


00,000 
00,000 
100.000 
100,000 
100,000 
<)0,000 
100,000 


Per  Ileail  o( 
l>o|iulution. 


Mirki. 

2'.t3 

3(17 
811 

3ia 

315 
323 


onal  income,  if  we 
issessments,  it  will 
amounted  in  18o4 
millions,— an  in- 
therefore,  from  an 
iccn  a  very  consid- 
russia. 

intries  also  afford 
le  question  of  the 
case  of  Austro- 
calculations  upon 
lughly  the  income 
industries  in  1859 
ifficial    publication 
illions  ;    and  the 


figures  for  the  year  1874,  taking  the  very  lowest  estimate, 
may  be  reckoned  at  from  5,500  to  6,000  million  florins. 
M.  Falbe  Hansen  is  of  opinion  that  the  national  wealth  of 
Denmark  amounted  in  1873  to  2  million  reichthalers,  and 
M.  Massalski  estimates  that  of  Belgium  at  29  milliard 
francs;  and  as  regards  Sweden,  it  appears  from  a  work 
which  has  been  issued  by  an  anonymous  statistician,  who 
has  evidently  devoted  much  care  and  attention  to  the  subject, 
that  its  national  wealth  in  the  year  1876  amounted  to  four 
and  one  half  milliards  kroners,  or  fiv>  milliards  marks. 

Still  more  interesting  than  this  review  of  Europe  is  a  study 
of  the  remarkable  progress  which  has  been  made  in  the  eco- 
nomic conditions  of  the  United  States.  This  country  pos- 
sesses the  data  of  regular  valuations  at  every  census,  and 
from  them  we  find  that  in  1790  the  wealth  of  the  then  three 
millions  of  inhabitants  was  estimated  at  $750,000,000  or  an 
average  of  $187  to  each  person.  The  decennial  increase  since 
that  date  is  shown  in  the  following  table :  — 


Teu. 


1790. 
1800. 
1810. 
1820, 
1830, 
1840. 
1850. 
1860. 
1870. 
1880. 


Popolatton. 


3,929,827 

5,306.937 

7,239,814 

9,638.191 

12,800,020 

17,009,453 

23,191,876 

31,500.000 

38,658.000 

60,155,783 


Wealth. 


$750,000,000 

1,072,000,000 

1,500,000,000 

1,882,000,000 

2,653,000,000 

8,764,000,000 

7,136,000,000 

16,159,000.000 

30,069,000,000 

43,642,000.000 


DeoennUl 

Decennial 

Percentage 

Percentage 

Increase  of 

Incream  of 

Population. 

Wealtli. 

Percent. 

Per  cent. 

3502 

4300 

86-43 

8900 

3813 

25-40 

83-40 

41-00 

3267 

41-70 

35-87 

89-60 

3659 

126  42 

22  00 

8618 

3000 

4600 

Average 

Property  to 

each 

Pereon. 


9187 
202 
207 
195 
206 
220 
307 
614 
780 
870 


Here  also  the  progress  of  national  wealth,  as  in  England, 
was  very  slow  prior  to  the  year  1840,  after  which  a  much 
more  rapid  increase  was  made.  The  remarkable  difference 
between  the  figures  of  1850  and  1860  is  attributed  in  the 
census-volume  itself  to  an  undervaluation  for  the  year  1850. 
It  is,  however,  affirmed  that  a  sufficient  improvement  in  sta- 
tistical methods  has  taken  place  since  1860  to  permit  of  a 


478 


ECONOMIC  HISTORY. 


ml- 


■  %  ■y:. 


I? 


correct  comparison  of  the  figures  of  that  year  with  those  of 
1870  and  1880,  and  to  establish  statistically  a  rapid  growth, 
particularly  in  the  decade  from  1860  to  1870.  Especially  in 
1880  was  an  exact  and  comprehensive  method  employed  in 
order  to  ensure  the  greatest  possible  accuracy.  The  com* 
parativc  slowness  in  the  increase  of  wealth  from  1870  to  1880 
is  explained  by  the  census  commissioner  by  two  considera- 
tions. In  the  first  place  the  valuation  in  1870  was  made 
upon  the  basis  of  a  depreciated  currency,  but  in  1880  upon 
a  gold  basis ;  and  in  the  second  place  there  has  been  an  in- 
creasing tendency  of  personal  property  to  escape  assessment. 
In  any  event  the  depression  in  the  years  1874  to  1879  has 
also  exerted  an  appreciable  influence. 

The  aggregate  of  the  national  wealth  for  1880  is  made  up 
from  the  following  particular  valuations:  — 

Hill.  DoU. 

Farms 10,197 

Residences  and  business  ireal-estate,  including  water- 
power     9,881 

Railroads  and  equipment 5,536 

Telegraphs,  shipping,  and  canals 419 

Live  stock,  farming-tools,  and  machinery    ....  2,406 
Household  furniture,  paintings,  jewelry,  books,  etc.  .  5,000 
Mines  and  quarries,  together  with  \  the  annual  pro- 
duct    781 

Three-quarters  of  the  annual  product  of  agriculture 
and  manufacture  and  of  the  annual  importation  of 

foreign  goods 6,160 

Churches,  schools,  asylums,  public  buildings    .     .     .  2,000 

Specie 612 

Miscellaneous  items,  including  tools  of  mechanics     .  650 

Total 43,642 

In  this  summary  of  national  wealth,  which  appears  not  to 
have  been  baaed  upon  the  assessed  valuation  of  property,  as 
that  amounted  only  to  $16,903,000,000,  but  upon  25,000 
replies  to  inquiries  and  upon  numerous  local  estimates,  the 
public  debt  of  the  Union  has  not  been  taken  into  considera- 
tion, although  it  is  chargeable  in  some  manner  to  the  total 
national  wealth  pro  rata  parte  ;  but  allowance  has  been  made 


i  > 


PROGRESS  m  TRADE  AND  INDUSTRY. 


479 


jr  1880  is  made  up 


kich  appears  not  to 
Ition  of  property,  m 
\  but  upon  25,000 
[local  estimates,  the 
Iken  into  considcra- 
Imanner  to  the  total 
Vance  has  been  road« 


for  private  indebtedness,  the  debts  of  the  various  States, 
corporations,  insurance  companies,  mortgages,  etc.  The  cor- 
rectness of  the  data  has,  however,  been  established  with 
greater  accuracy  as  regards  the  details,  and  under  any  cir- 
cumstance we  have  here  to  do  with  one  of  the  most  inter- 
esting direct  valuations  of  modern  times. 

Fur  the  completion  of  the  foregoing  data  concerning  the 
national  wealth  of  the  United  States  certain  figures  from  the 
annual  reports  of  the  Treasury  Department  will  serve,  as  they 
likewise  tend  to  show  both  the  rapid  increase  of  national 
prosperity  in  recent  years  and  in  particular  the  remarkable 
fluctuations  since  1879. 

[BUUloM  omitted.] 


tot  Fiwal  Yean  Ending 
30th  June. 


Ordinary  national  rev- 
enue  

Ordinary  national  ex- 
penditure (exclu- 
sive of  sinking  fund 
tnd  interest  on 
debt)     

Net  public  debt      .     . 

Interest  on  public 
debt 


181S. 


284^ 


171-5 
2,1287 

1031 


1880. 


333-6 


1691 
1,942-2 

96-8 


1881. 


360-8 


177-1 
1.840-6 

82-6 


1883. 


403-6 


186-9 
1,688-9 

711 


1883. 


1884. 


308-3 


206-2 
1,661-1 

69-2 


348-6 


189-6 
1.4600 

646 


It  would  be  impossible  to  find  in  the  financial  position  of 
any  other  State  such  striking  evidence  of  the  increase  of 
national  wealth  as  is  discernible  in  the  above  figures. 

The  figures  which  we  have  already  quoted  will  be  sufficient 
to  convince  every  one  of  the  very  remarkable  universal  in- 
iirease  which  has  taken  place  in  national  wealth  during  the 
latter  part  of  the  present  century,  both  incomes  and  capital 
having  increased  in  a  much  more  noticeable  degree  during 
this  period  than  in  any  other.  We  will  therefore  proceed  to 
a  statement  of  the  causes  which  have  contributed  to  this 
vast  increase  of  wealth, —  and  this  is  a  subject  which  cannot 
be  dismissed  in  a  few  words,  but  requires,  in  order  to  make 
it  thoroughly  clear  and  comprehensive,  to  be  dealt  with  some- 
what exhaustively.    It  will  here,  however,  be  practicable  only 


H 


;  *.  ',' 


81:  • 


480 


ECONOMIC  HISTORY. 


Li') 


.'  ')' 


\m 


"  I  '"    Af  ^     -^    ■;•    ' 


to  enumerate  in  as  clear  and  concise  a  manner  as  possible 
what  have  been  the  most  important  factors  in  determining 
this  remarkable  development  of  national  wealth.     One  uf  the 
chief  points  to  be  considered  is  the  influence  exercised  un  the 
economic  conditions  of  the  world  by  the   introduction  of 
machinery  and  its  substitution  for  manual  labor,  which  is 
one  of  the  growths  of  the  present  century.    The  importance  of 
the  wonderful  inventions  and  improvements  which  have  taken 
place  is  visible  in  the  effect  which  they  have  had  upon  the  in- 
crease of  capital  invested  in  machinery,  and  which  aa  an  in- 
vestment has  far  exceeded  in  profit  that  employed  in  manual 
labor.    Then  too  the  application  of  steam,  which  has  wrought 
so  complete  a  change  in  locomotion  must  be  recognized.    As 
an  indication  of  the  vast  amount  of  the  world's  capital  which 
is  invested  in  steam  undertakings,  we  may  mention  that  Dr. 
Engel,  in  one  of  his  interesting  publications,  estimates  the 
capital  so  invested,  in  round  numbers,  at  133  milliard  marks, 
distributed  as  follows:   eighty  milliards  in  railways,  forty 
milliards  in  various  steam  undertakings,  five  milliards  in 
sea-going  steamships,  and  the  remainder  in  river  steamers. 
The  part,  then,  taken  by  steam  as  a  motive  power,  and  the 
introduction  of  machinery  in  the  improvement  of  the  eco- 
nomic conditions  of  the  world,  are  of  the  very  greatest  impor- 
tance.    These  inventions  have  been  the  means  of  causing  a 
very  largo  increase  in  the  accumulation  of  national,  and  in  a 
corresponding  degree  of  the  world's  wealth.    Another  impor- 
tant element  to  which  we  must  direct  attention  is  the  devel- 
opiuunt  of  the  credit  system,  which  has  in  all  civilized  parts 
of  the  world  taken  place  during  the  last  twenty-five  years. 
This  does  not  necessarily  produce  fresh  capital,  but  it  has 
the  effect  of  facilitating  the  better  application  of  capital 
which  is  anywhere  disposable;  floating  capital  is  collected 
and  is  brought  into  more  permanent  forms  of  investment. 
Deposit  banks,  savings  banks,  and  credit  institutions,  and 
above  all  the  general  employment  of  bills  of  exchange,  which 
have  now  become  universally  adopted,  have  all  been  the 
means  of  supplying  what  was  in  earlier  years  a  want  much 
felt,  and  have  become  important  factors  in  determining  the 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


481 


augmentation  of  capital.  The  judicious  operations  of  bank- 
ing are  mainly  instrumental  in  rendering  capital  active  and 
proiitictive.  It  will  bo  seen  by  reference  to  the  international 
savings  bank  statistics,  published  by  the  Italian  Statistical 
Bureau  in  1870,  how  vast  the  operations  of  savings  banks 
were.  From  tliis  work  it  appears  that  althougli  these  insti- 
tutions were  only  established  some  forty  or  fifty  years  ago, 
vet  in  the  year  1875  in  Europe  alone  about  «>, 400, 000, 000 
marks,  and  in  the  United  States  about  3,500,000,000  marks, 
miiiving  in  round  numbers  a  total  of  10  milliard  marks,  had 
been  invested.  This  is  a  sufficient  indication  of  the  influence 
exercised  over  the  accumulation  of  capital  by  other  and  simi- 
lar institutions,  and  tends  to  show  how  by  this  credit  system 
activity  and  usefulness  have  been  given  to  accumulations 
which  without  these  benefits  would  have  become  mere  hoards. 
And  lastly,  we  come  to  the  question  of  the  maintenance  of 
the  working  popiilation;  and  here  we  cannot  lay  too  much 
stress  upon  the  necessity  which  exists  of  increasing  and 
maintaining  a  national  working  population,  this  population 
in  itself  representing  so  much  living  capital. 

We  will  now  turn  to  another  method  of  estimating  wealth, 
namely,  an  attempt  to  determine  the  economic  condition  of  a 
country  during  a  fixed  period  of  time.  This  is  a  labor  analo- 
gous to  that  which  the  science  of  meteorology  has  to  set 
before  itself  in  determining  the  peculiarities  of  weather  in  a 
certain  neighborhood.  As  climate  depends  on  a  great  com- 
plexity of  individual  elements,  so  what  we  call  the  world's 
economy  is  the  result  of  various  factors,  which  act  upon  the 
material  processes  of  life  in  a  given  population  with  greater  or 
loss  power.  In  b  jth  cases,  in  the  statistics  of  meteorology  and 
icontmy,  a  similar  analytical  examination  of  the  causes  of  a 
total  impression  have  to  be  the  object  of  investij^ation;  but 
while  meteorology  deals  with  actual  elements  or  factors  of  the 
present,  such  as  atmospheric  pressure,  temperature,  humidity, 
ilirectlon  and  force  of  wind,  etc.,  while  it  possesses  exact 
measuring  instruments  for  the  determination  of  these,  and 
fmally  can  supply  itself  with  an  endless  series  of  exact  obser- 
vations, economic  statistics  must  be  satisfied  with  surrogates 

31 


nm 


482 


ECONOMIC  HISTORY. 


\V  ■ 


fl? 


i 

is:: 


t 


'*■'■■  III '■.'»'-* '&  :'■' 

■  "  ft:- 


of  the  methods  of  natural  scicnco.    In  order  to  calculate  upon 
the  real  elements  of  economic  conditions  when  frequently  re- 
maining concealed,  our  investigation  must  often  be  satiKfiod 
with  such  appearances  as  lie  upon  the  surface,  and  which  in 
their  nature  arc  merely  symptoms,  and  actually  have  tliom- 
selves  no  ultimate  effect  on  the  sources  and  action  of  tilings. 
Besides  this,  even  these  symptoms  cannot  in  the  real  signifi- 
cance of  the  word  bo  measured  or  exactly  expressed,  but  r nlv 
individually  employed  for  computations  and  numerical  com- 
parisons.   And  finally,  the  same  primary  causes  in  the  mate- 
rial life  of  culture  have  not  the  sahie  effects  among  all  nations 
and  at  all  times.     Thus  even  if  wo  are  able  to  point  to  more 
than  more  symptoms,  we  shall  have  to  be  careful  in  forming 
our  conclusions,  and  cannot  afford  to  overlook  that  almost 
all  such  results  must  in  their  very  nature  be  empirical,  that 
is  to  say,  must  depend  upon  laws  which  are  only  binding 
upon  the  given  circumstances  of  space  and  time,  and  in  no 
way  permit  us  to  generalize.      The   desired  object,  tliough 
comparatively  limited,    is  nevertheless  a  difficult    one  to 
attain ;  it  presents  an  array  of  operations  which  as  regards 
physical  science  are  superfluous,  but  are  here  indispensable, 
One  of  these  operations  consists  in  the  choice  of  the  most 
important,  and  of  a  study  of  the  remainder  of  the  accessible 
symptoms  of  the  economic  situation  which  are  capable  of 
being  estimated.     The  symptoms,  then,  of  the  world's  econ- 
omy will  be  dealt  with  in  the  following  pages.     Another, 
which  is  an  exact  operation  of  measurement,  consists,  accord- 
ing to  our  theory,  in  the  endeavor  to  deduce  the  type  or  nor- 
mal course  of  the  groups  of  facts  or  observations  chosen  as 
symptoms  of  the  economic  situation,  which  embrace  definite 
periods.     The  establishment  of  the  type  will  result  in  many 
cases  in  the  choice  of  normal  years  as  the  point  of  compari- 
son, and  of  the  mean,  in  many  other  cases,  by  choosing  tlie 
commencement  or  the  end  of  the  series,   and  taking  the 
average  of  an  entire  period  as  the  mean. 

There  is  scarcely  any  period  which  has  been  so  character- 
ized by  a  series  of  powerful  reactions  as  that  comprised  be- 
tween the  years  1870-85.     From  1870  until  the  middle  of 


.11 


PROGRESS  IS  TRADE  AND  INDUSTRY. 


488 


1873  almost  cvorywhere  the  progress  of  economic  lifo  could 
ho  clearly  traced,  and  this  was  a  period  marked  by  a  com- 
mercial crisis  which  made  itself  universally  felt.  There 
followed  then  a  time  of  depression  lasting  until  the  year 
1S7!>,  when  a  reaction  set  in.  This  revival  was  experienced 
in  tlio  United  States  about  the  end  of  1879,  and  at  the  com- 
nii^ncoinent  of  1880  was  felt  in  the  countries  of  western 
Europe,  Great  Britain,  the  Netherlands,  Belgium,  France, 
ami  Oermany.  Tlie  effects  of  this  reaction  were  somewhat 
slow  in  manifesting  themselves  in  European  countries,  those 
first  experiencing  them  being  Holland,  England,  Belgium, 
and  France,  while  the  Oerman  States,  Italy  and  Austro- 
Hungary  were  among  the  last.  It  will  be  impossible  in  a 
work  of  this  description  to  pursue  a  complete  analytical  in- 
vestigation into  all  the  symptoms  which  are  likely  to  afford 
any  indication  of  the  position  of  economic  progress.  These 
symptoms  must  be  considered  in  groups,  which  we  shall 
classify  as  follows, — primary  symptoms,  secondary  symp- 
toms, and  reflective  symptoms. 

Under  primary  symptoms  we  proceed  first  to  deal  with  the 
question  of  the  extent  of  production.  There  is  no  more  re- 
liable basis  on  which  to  determine  the  real  economic  condi- 
tion during  a  fixed  period  of  time  than  that  which  lies  in  the 
activity  manifested  in  producing  power;  but  in  considering 
this  subject  we  must  not  lose  sight  of  the  fact  that  great  dis- 
crimination is  necessary  to  distinguish  between  the  relative 
importance  of  these  symptoms  of  increased  production.  For 
instance,  we  must  inquire  whether  that  particular  branch  of 
industry  in  which  such  expansion  is  visible  affects  articles 
which  are  liable  to  extremes  of  activity  and  depression,  and 
whether  by  this  the  decline  of  great  industries  is  regulated; 
and  again  we  must  satisfy  ourselves  to  what  extent  the  im- 
provements or  the  reverse  are  affected  by  the  prevailing  con- 
ditions of  administration  or  government.  As  affording  a 
certain  indication  of  the  position  of  economic  progress,  we 
will  take  the  case  of  mining  industries.  Activity,  or  stag- 
nation here  are  certain  symptoms  of  favorable  or  unfavorable 
position.     On  the  other  hand,  if  we  take  the  case  of  harvests 


484 


ECONOMIC  HISTORY. 


IN" 

i 

I 


m 


and  tho  wheat  productions  of  good  and  bad  years,  as  those 
are  affected  by  the  weather,  and  are  entirely  dependent  for 
their  abundanee  upon  the  rain  and  sun  in  due  season,  tlu'v 
have  only  a  easiuil,  and  not  what  we  should  call  a  sympto- 
nxatic  character. 

Let  us  now  draw  our  deductions  from  the  symptoms  as 
manifested  in  the  extent  of  production  during  the  |KMi(ul 
1870-8;*).     All  of  the  more  im}»ortant  iiulustries  of  the  world 
experienced  from  1870  to  1878  a  wonderful  extension,  and 
as  affecting  the  world's  prosperity,    this   may  be  regarded 
as  a  token  of  the  most  favorable  ecimomic  ccmditions.     Wo 
will  take  as  an  example  the  enormous  increase   in  cotton 
indjistries  and   in  mines  an«l   iron  works.     As  regards  Iho 
former,  the  number  of  spindles  and  looms  have  everywhere 
increased  very  considerably,  and  the  quantity  of  yarn  and 
woven   goods  exported    from   England,   which  amounted  in 
1870  to  042  million  pounds,  rose  in  1878  to  1,078  millions. 
The  value  of  cotton  goods  in  the  same  period  increased  from 
ninety-three    millions   sterling   to   104   millions,  —  similar 
sympt(mis  are  everywhere  visible  in  the  industries  of  the 
world  for  the  same  period.     As  regards  iron  works,  there 
was  a  considerable  increase  in  the  number  of  furnaces  set 
up,  and  the  total  production  of  pig  iron  in  the  world  rose 
from  twelve  million  tons  in  1870  to  nearly  fifteen  millions 
in  1878.     Everything  during  this  period  in  fact  tended  to 
prove  that   the  world's  prosperity  was  making  very   raiml 
strides.     A  change,  however,  was  wrought  by  the  coninier- 
cial  crisis  of  187eS,  and  the  effect  of  this  crisis  was  to  i)arii- 
lyze  both  the  textile  and  iron  industries,  the  statistics  of  tho 
amount  of  production  in  each  case  showing  a  gradual  Imt 
steady  diminution.      In  the  chief  centres  of  the  iron  industrv 
there  were,  at  the  end  of  1870,  2,587  furnaces  in  existeiioe. 
which  were  approximately  capable  of  producing  at  the  lowest 
estimate  twenty  million  tims  of  iron;  there  were,  however. 
but  1,829  of  these  furnaces  at  work,  while  1,208  were  at  a 
standstiU,  and  the  quantity  of  iron  produced  amounted  to 
only  280  million  centners. 

Again  in  1878  we  have  very  good  authority  for  stating  that 


PROG  HESS  IN   TRADE  AND  INDUSTRY. 


485 


it  was  a  time  of  almost  universal  depression.  To  demonstrate 
this  more  clearly,  we  will  take  the  case  of  the  most  impor- 
timt  of  the  great  industries,  namely,  the  cotton  industries, 
whicli  in  Groat  Britain,  under  favorable  circumstances,  give 
I'lnployment  to  some  four  milliims  of  people.^  In  the  years 
ISTt)  and  1877,  though  there  were  large  sales  owing  to  a  great 
amount  of  stock  having  accumulated,  the  prices  obtained 
woir  considerably  below  the  market  value.  In  1878  there 
sit  in  a  complete  cotton  crisis,  and  the  effects  of  this  were 
more  severe  than  any  which  had  been  experienced  by  the 
invi't'ding  generation.  In  the  more  lirmly  established  houses 
tlio  liouis  of  labor  wore  shorfonod,  while  in  others  business 
was  cutiroly  suspended,  and  there  ensued  a  period  of  de- 
pivssiou,  not  only  as  regards  England,  but  in  fact  the  whole 
wnrld,  unparalleled  in  commercial  history.  According  to 
Ellison's  cotton  reports  the  depression  reached  its  climax 
(luiint;  tlie  first  throe  mouths  of  1870,  when  there  was  appar- 
ent au  indication  of  a  grand  revival  of  trade.  The  same 
fiataros  which  charaotorized  the  cotton  trade  were  ap{)arcnt 
in  woollen,  silk,  and  linen  industries,  —  the  depression  in 
tho  two  latter  being  more  marked  than  in  the  former. 

It  was  only  in  the  latter  part  of  1879  and  in  the  beginning 
oflSSO  that  a  marked  improvement  was  to  be  seen  in  most 
of  till'  intportant  industries.  It  was  particularly  noticeable 
iiitlie  coal  trade,  the  increase  in  the  productiim  of  which  in 
Ciivat  Hritain,  (lormany,  France,  Belgium,  and  more  espe- 
cially in  America  (from  fifty-two  milli(m  tons  in  1878  to  sixty- 
niiii'  millions  in  1880),  may  be  assuredly  taken  as  a  certain 
indication  of  a  steady  improvement  in  the  world's  economic 
otiiilitions.  Soon  afterwards,  in  tho  autumn  of  1870,  a  stim- 
ulus was  given  to  tho  produoticm  of  inm  in  America,  followed 
in  a  tVw  immths  by  ronowod  activity  in  tho  iron  industries 
ufHroat  iiritain  and  most  of  tho  Kuropoan  countries.  The 
tiivs  which  had  boon  for  some  time  extinguished  were  once 
mDiv  kindled,  and  the  production  of  iron  increased  in  one 
vtar  at  the  rate  of  between  twelve  and  twenty-one  per  cent. 
There  was  also  renewed  activity  in  the  smelting  and  puddling 

'  This  seems  a  great  over-estimate.  —  Editor  of  "Journal." 


48G 


ECONOMIC  HISTORY. 


V:-' 


m  - 


works,  and  in  fact  towards  the  end  of  1880  there  was  not 
only  a  marked  but  a  widespread  improvement  of  trade.     The 
cotton  industries  of  the  world  particularly  exhibited  signs 
of  revival,  and  this  may  be  accepted  as  a  certain  symptom  of 
an  amelioration  of  the  economic  position.     Taking  the  case 
of  spun  yarn,  the  weekly  production,  which  in  Great  Britain 
amounted  in  the  year  1878-79  to  50,020  pounds,  and  on  tho 
Continent  to  47,352  pounds,   rose  in  1879-80  to  58,038  and 
50,344  pounds  respectively,  thus  showing  an  increase  in  tiiis 
one  article  of  572,200  pounds,  or  nearly  twelve  per  cent  in 
this  year  alone.     The  other  branches  of  textile  industries  did 
not  in  the  same  degree  exhibit  such  an  imj)rovemcnt,  yet  it 
was  evident  that  toward  the  close  of  1880  unmistakaljle  siirns 
of  revival  were  not  wanting.     This  revival  continued  durin;.' 
the  years  1881-82,  but  was  not  however  destined  to  l)c  per- 
manent.    The    capacity  of  the  markets   of  the  world  was 
everywhere  overestimated,  and  the  extent  of  production  in 
the   principal    industries  soon  exceeded  the   demand.    Al- 
though in  1883  an  extension  in  some  of  the  branches  of  pro- 
duction was  still  noticeable,  yet  the  prices  of  the  various 
products  had  commenced  to  decline.     During  the  years  1884- 
85  the  decline  in  the  production  of  all  the  industries  to  which 
we  have  here  called  attention  was  most  clearly  marked;  and 
as  these  industries  comprise  three-quarters  of  the  value  of 
the  entire  production  of  the  world,  de[)ression  or  activity  in 
them  forms  an  excellent  indication  of  the  actual  pros])crity 
of  the  world. 

Again,  tlu^  extent  of  consumption  is  of  symptomatic  im- 
portance in  regard  to  the  condition  of  national  wealtli, 
The  increase  or  decrease  in  the  consumption  of  articles 
which  may  be  termed  necessaries,  such  as  breadstulTs,  ))ri)vi- 
sions,  and  clothing,  are  not  such  reliable  signs  of  an  im- 
provement or  the  reverse  in  national  prosperity  as  the  sann' 
fluctuations  which  mav  be  observed  in  those  articles  which 
are  not  indi8i)en8able  to  man,  and  come  under  the  heading  ot 
luxuries,  as  it  is  obvious  that  in  a  time  of  depression  tliore 
would  be  a  far  more  restricted  consumption  in  the  latter  than 
would  be  found  if  trade  and  industries  were  flourishing  and 


II- 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


487 


I  there  was  not 
t  of  trade.     The 
exhibited  signs 
tain  symptom  of 
Taking  the  case 
in  Great  Britain 
unds,  and  on  the 
80  to  58,088  and 
I  increase  in  this 
i'clve  per  cent  in 
ile  industries  did 
provement,  yet  it 
[imistakable  siirns 
continued  duriiiL' 
'stined  to  be  por- 
)f  the  world  was 

of  production  in 
he  demand.  Al- 
c  branches  of  pro- 
res  of  the  various 
ig  the  years  1884- 
ndustries  to  whioli 
}arly  marked ;  and 
.'s  of  the  value  of 
sion  or  activity  in 

actual  prosperity 

symptomatic  im- 
national   wouUli. 
uption   of  artless 
breadstufl's,  pr'|vi- 
c  signs  of  an  im- 
Ipcrity  as  the  sanv 
[lose  articles  whidi 
jider  the  heading  '>t 
of  depression  tliovo 
n  in  the  latter  than 
ere  flourishing  and 


prosperous.  Although  the  data  are  of  a  somewhat  meagre 
description,  we  will  again  take  the  period  of  1870-85  in 
which  to  form  our  conclusions  as  to  the  position  of  national 
wealth,  judging  from  the  extent  of  consumption.  If  we  look 
first  at  the  consumption  of  coffee,  tea,  sugar,  and  tobacco, 
it  would  appear  that  the  same  indications  are  shown  of 
material  prosperity  during  the  period  of  1870-73,  and  that 
the  effect  of  the  commercial  depression  which  followed  this 
period  did  not  so  seriously  affect  the  national  wealth  as 
ini;ji;ht  have  been  expected,  the  consumption  being  certainly 
to  sonu!  extent  limited,  but  in  most  countries  only  in  a  very 
slight  degree.  From  1878  to  the  end  of  1879  seems  to  have 
been  the  most  unfavorable  time  of  the  whole  period.  On 
the  other  hand,  in  the  year  1880  a  revival  is  i)erceptible 
throuirhout  the  economic  world,  which  continued  with  vigor 
during  the  years  1881-82,  and  was  again  checked  in  the  years 
188o-84.  As  an  example  of  the  consumption  of  coffee,  the 
supply  received  in  Europe  in  1871  amounted  to  2.47  million 
centners,  in  1875  to  3.30  millions,  but  in  1880  it  fell  as  low 
as  2. 74  million  centners.  From  1880  the  consmnption  stead- 
ily increased  until  1883,  when  it  reached  4.39  million  cent- 
ners. It  then  again  declined  to  4.09  million  centners  in  1884, 
ami  to  4.31  in  1885.  The  great  increase  in  the  consumption 
of  tea  in  1870-74  was  almost  universal ;  it  was  (uily  in  1878- 
"9  that  the  consumption  was  first  cheeked;  and  in  the  years 
1880-83  it  again  distinctly  increased.  The  same  may  be  said 
as  regards  tobacco.  A  study  of  these  articles  in  individual 
oountries  also  reveals  similar  economic  indications.  In 
America,  for  instance,  in  the  fiscal  year  1S7U-80  the  quan- 
tity of  coffee  im})orted  amounted  to  sixty-nine  million  pounds, 
or  1.4  poimds  per  head  of  the  community;  that  of  tea  to 
twelve  million  pounds,  or  0.25  pinmds  per  head;  tobacco 
loaf  to  three  milliiuis  ;  wine  6,394  million  gallons  and 
l,oO:3,35G  bottles;  and  the  American  people  retained  in  this 
year  for  home  consumption  about  130  million  pounds  more 
of  refined  sugar  than  they  had  done  in  previous  years.  In 
Enirlind,  though  this  was  a  favorable  year,  yet  the  increase 
iu  luxuries  was  small,  only  cocoa,  wine,  and  tobacco  being 


488 


ECONOMIC  HISTORY. 


consumed  in  greater  quantities,  whereas  there  was  a  decrease 
in  tea,  coffee,  and  sugar.  An  examination,  however,  of  the 
return  of  taxes  for  the  last  nine  months  of  the  year  1880 
point  conchisively  to  the  fact  that  the  economic  position  was 
substantially  ameliorated.  In  France  the  signs  of  incroas- 
ing  prosperity  were  more  apparent  than  in  England,  a  very 
considerable  augmentation  in  the  imports  of  coffee,  sugar, 
and  tea  being  perceptible  in  1880,  and  although  this  year 
was  not  a  very  favorable  one  as  regards  the  wine  production, 
yet  as  a  set-off  against  this  there  were  in  1880,  S^SjOOO 
hectolitres  more  beer  consumed  than  in  1879,  and  about 
9,463  kilograms  (valued  at  niiif>  million  francs)  of  tobacco 
and  cigars  than  in  the  previous  years,  and  there  arc  not 
wanting  signs  to  show  that  this  increase  of  material  prosiici- 
ity  was  not  of  a  sj)asmodic  character.  A  similar  progress  was 
also  to  be  seen  in  Belgium.  A.nd  finally  we  will  take  the 
case  of  German}^,  where  in  the  year  1878  about  8.7  million 
marks  more  duty  was  paid  on  luxuries,  such  as  sugar,  to- 
bacco, brandy,  and  beer,  than  in  previous  years,  and  this  in 
connection  with  the  information  already  given  with  regard 
to  the  imports  of  foreign  produce,  effectually  removes  all 
doubt  as  to  the  improvement  at  that  time  in  its  oeononiic 
position.  Only  in  Italy  was  there  to  be  found  a  sligl.t  indi- 
cation of  an  unfavorable  tendency,  and  in  Austria  there  was 
an  inference  of  the  maintenance  of  the  status  quo,  the  revival 
in  both  instances  having  taken  place  since  1880. 

No  one  who  has  studied  the  commercial  statistics  of  the 
decade  1870-1880  can  fail  to  be  impressed  with  the  enonnons 
increase  which  has  taken  place  in  the  consumption  of  textile 
fabrics,  iron,  steel  rails,  and  the  producti(m  of  other  staple  in- 
dustries. To  follow  these  in  all  their  details  would  be  out  of 
place  here;  it  will  only  be  necessary  to  remark  that  they  ex- 
perienced a  moderate  rise  dating  from  the  year  1873,  and  a 
partial  decline  in  1880.  As  an  American  writer  forcil)ly  put 
it,  the  poor  man  in  the  time  of  depression  wore  his  coat  twice 
as  long  as  he  otherwise  would,  the  rich  man  entertained  less. 
and  in  many  instances  disposed  of  his  horses  and  carriages: 
the  tailor  and  the  shoemaker  complained  that  they  had  much 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


489 


to  mend  and  but  little  to  make.  As  an  illustration  of  this, 
we  may  mention  that  in  England  in  1878  about  twenty-six 
million  pounds  less  wool  and  897,588  pounds  less  silk  were 
consinned  than  in  1877,  and  besides  this,  all  the  warehouses 
were  full  of  stock.  The  universal  decrease  in  the  consump- 
tion of  these  staple  articles  continued  during  the  gloomy 
period  1874-79.  The  depression  was  of  such  a  lasting  char- 
acter, and  carried  such  disheartening  ett'ccts  in  its  train, 
that  one  hardly  cared  to  inquire  how  it  happened  that  such 
an  unfavorable  state  of  affairs,  unbroken  by  any  prospect  of 
a  speedy  revival,  could  exist  in  central  Europe  and  America. 
With  this  restriction  in  consumption  was  associated  a  cur- 
tailment of  profits  and  a  consequent  lessening  of  income; 
and  when  in  1879  the  horizon  commenced  to  clear,  and  the 
first  ray  of  hope  was  to  be  seen,  it  was  welcomed  with  a 
fi'oliiig  of  intense  relief  by  all  classes  of  the  community. 

We  will  now  see  from  the  extent  of  commercial  facilities 
what  eunclusions  may  be  formed  as  to  the  actual  economic 
position;  and  it  appears  to  us,  after  many  years  of  patient 
ul)servation,  that  the  increased  activity  in  commercial  enter- 
prises sliould  assuredly  be  placed  in  the  front  rank  of  what  we 
have  called  the  primary  symptoms.  If  one  follows  the  im- 
prDvenicnts  which  have  during  the  last  few  years  been  made 
in  railwiiys,  postal  systems,  telegraphs,  banking,  etc.,  one 
cannot  tail  to  be  impressed  with  their  very  vast  importance 
as  factors  in  determining  the  condition  of  the  world's  pros- 
pirity.  Tims,  in  all  civilized  parts  of  the  world,  railways, 
w  of  the  most  importnnt  of  these  factors,  showed  a  very 
lajiid  increase  from  1870  to  1873  or  1874,  both  in  the  number 
'f  passen<rcrs  carried  and  in  the  quantity  of  goods  conveyed, 
^iii'las  a  natural  consequence  the  roceijjts  from  both  sources 
W'atly  increased.  From  1874  to  1878.  and  in  many  countries 
until  1S70,  tliore  ensued  a  period  of  stagnation  in  railroad 
fntorpriso,  and  in  fact  to  such  an  extent  that  not  only  were 
'"ntlVcts  very  disastrous  as  regards  industry,  but  great  social 
I  danirers  were  apprehended. 

As  an  example  of  the  stagnation  of  industrial  life  in  North 
America,  we  may  state  that  the  loss  to  holders  of  scrip  in 


490 


ECONOMIC  HISTORY. 


bankrupt  or  worthless  railways  in  1877  is  estimated  in  round 
numbers  at  1000  million  dollars,  and  that  tbey  were  power- 
less to  prevent  the  fearful  strike  wbich  happened  on  the  Balti- 
more and  Ohio  Railway  on  16th  July,  1877.  It  was  onlv  in 
1879,  or  the  beginning  of  1880,  that  an  improvement  mani- 
fested itself  in  railway  enterprise,  and  the  revival  was  first 
experienced  in  the  United  States.  In  Great  Britain,  Franco, 
Belgium,  and  Austro-IIungary  the  traflic  receipts  began  tlieii 
gradually  to  increase ;  while  in  Italy  alone  a  similar  iiupuisc 
does  not  appear  to  have  been  given  until  the  autumn  of  1881. 
From  1881  to  1883  great  activity  in  railway  construction  and 
large  increase  of  traffic  were  manifested  in  all  countrios  of 
western  civilization.  There  appeared,  however,  in  the  United 
States  symptoms  of  a  reaction  in  1883,  which  led  to  an  actual 
crisis  in  1884.  In  European  countries  also  a  stagnation  in 
commerce  began  in  1884,  which  continued  in  1885,  and  caused 
a  dangerous  diminution  in  the  dividends  of  railways. 

In  shipping,  the  same  features  are  to  be  seen  as  those  which 
characterized  railway  enterprise.  During  the  same  poiiod  we 
notice  similar  peculiarities  in  this  particular  branch  of  indus- 
try. The  fluctuations  in  the  number  and  tonnage  of  vessels 
built,  the  increase  or  decrease  in  the  tonnage  entering  or 
clearing,  and  the  amount  of  freight,  —  all  these  will  show  the 
condition  of  the  world's  prosperity. 

The  postal  and  telegraphic  statistics  are  not  of  such  valu- 
able assistance  as  symptoms  of  the  periodically  favorahle  or  \ 
unfavorable  condition  of  economic  progress.     We  will,  how- 
ever, give  the  following  figures,  as  they  tend  to  show,  in  a 
slight  degree,   which  were   the    favorable   and   unfavorable 
periods.     The  number  of  newspapers  and  books  sent  through 
the  British  post-office  rose  from  202  millions  in  1871  to  i-A 
millions  in  1873,  that  is,  about  twenty-six  millions  annualh  : 
from  1873  to  1874,  however,  the  number  rose  to  only  '2'ii^  j 
millions,  that  is,  about  four  millions  annually.    With  the  revi- 
val of  trade  this  number  again  rose  from   328  millions  inj 
1879  to  412   millions  in  1882,  that  is,   about  twenty-eight 
millions  annually,  the  same  as  before  the  crisis ;  and  fromj 
1882  to  1885,  to  464  m.,  indicating  a  slight  retrogression.  The  I 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


491 


;iiuated  in  round 
iiey  were  power- 
ned  on  the  Balti- 
.    It  was  only  in 
provcmcnt  raani- 
revival  was  fust 
t  Britain,  Franco, 
ceipts  began  tlien 
a  similar  impulse 
I  autumn  of  1881. 
•  construction  and 
n  all  countries  of 
!ver,  in  the  United 
Bh  led  to  an  actual 
30  a  stagnation  in 
n  1885,  and  caused 
railways, 
seen  as  those  which 
the  same  period  we 
ar  branch  of  iudus- 
tonnage  of  vessels 
)nnage  entering  or 
these  will  show  the 

^  not  of  such  valu- 
licallv  favorable  or 
fss.     We  will,  how- 
lend  to  show,  in  a 
and  unfavorable 
looks  sent  through 
Ins  in  18Tlto2o-l! 
I  millions  annually; 
rose  to  only  ^^' 
\\y.    With  the  rcvi- 
328  niillioii*  in] 
t^bout  twcnty-ciglit 
crisis ;  and  im\ 
Retrogression.  Tbo 


number  of  telegrams,  which  in  1870  amounted  to  8.6  mil- 
lions, increased  in  1874  to  17.8  millions,  shov/ing  a  yearly 
increase  of  2.8  millions ;  from  1874  to  1878  tho  number 
only  increased  to  22.5  millions,  an  annual  increase  of  0.8 
million.  On  the  other  hand  in  1881  the  telegrams  amounted 
in  round  numbers  to  thirty  millions,  showing  an  average  in- 
crease for  three  years  of  2.6  millions,  as  before  the  crisis ; 
l)ut  after  that  date  there  occurred  a  diminution,  as  in  1885 
the  number  had  reached  only  33.2  millions. 

Let  us  now  take  another  of  the  primary  symptoms  of 
economic  progress  ;  viz.,  the  state  of  the  money  market.  If 
we  look  at  tho  value  of  paper  currency  as  the  substitute  for 
cash  payments,  we  find  that  it  increased  during  the  period 
18G9-73  about  1,679  million  marks,  and  declined  from  that 
date  till  1879,  to  the  extent  of  2,350  million  marks.  At  this 
time  there  was  a  larger  amount  of  uninvested  capital  lying  idle 
than  had  ever  before  been  known.  The  bank  hoards  accumu- 
lated, from  the  commencement  of  the  period  of  stagnation, 
at  least  1,100  to  1,200  millions  of  marks  in  gold  and  silver. 
If  we  take  the  returns  of  the  two  greatest  financial  institu- 
tions in  the  world,  the  clearing  houses  of  London  and  of  New 
York,  we  find  that  they  show  an  increase  from  190  milliard 
marks  in  1870-71,  to  approximately  256  milliards  in  1873-74 ; 
and  on  the  other  hand  in  1878-79  they  stood  at  188  milliards, 
whiili,  taken  in  conjunction  with  the  increase  of  population, 
must  lio  regarded  as  an  imusual  depression.  How  great  was 
the  revival  of  trade  in  1880  may  be  gathered  from  the  returns 
of  both  clearing  houses,  which  show  an  increase  from  203 
milliard  marks  in  1878-79  to  266  milliards  in  1880. 

The  condition  of  foreign  commerce,  though  of  course  af- 
fected by  the  state  of  industrial  enterprise,  also  furnishes  in 
itself  an  important  symptom  of  the  economic  situation,  as 
Ity  it  one  can  compare  the  rise  and  fall  in  the  purchasing 
power  of  nations.  The  wonderful  fluctuations  in  national 
wealth  are  nowhere  more  clearly  shown  than  in  the  statistical 
trade  returns  of  the  last  decade.  The  figures,  although  they 
caimot  be  said  to  be  in  any  case  strictly  accurate,  still  point 
conclusively  to  progress  or  retrogression  in  material  pros- 


irr 


492 


ECONOMIC  HISTORY. 


Art 


Ml 


M 


11  .'IT 
m 


^': 


perity.    In  almost  all  countries  the  export  returns  are  less 
reliable  than  the  statistics  of  imports.     It  must  be  borne  in 
mind  also  that  the  volume  of  foreign  trade  is  determined  not 
by  quantities  but  by  value,  and  this  is  to  a  certain  extent 
misleading,  as  changes  must  take  place  from  time  to  time  in 
the  aggregate  values  of  imports  and  exports  ;  and  one  ouglit 
to  consider  how  far  these  changes,  which  are  due  to  fluctua- 
tions in  average  prices  of  commodities,  affect  the  total  import 
and  export  trade.     We  find,  then,  from  an  examination  of  tlie 
trade  returns  of  the  most  important  countries  of  the  earth, 
that  the  total  import  and  export  trade  increased  from  18(55 
to  1872  annually  2,166  million  marks ;  from  1872  to  1873 
about  1,620  million  marks;  while  from  1873  to  1877  it  expe- 
rienced a  sudden  and  rapid  decline.    The  year  1878  witnessed 
the  inauguration  of  a  brighter  era,  trade  improving  to  tlic 
extent  of  nearly  1,400  million  marks ;  and  this  revival  con- 
tinued to  make  progress  throughout  the  years  1879  and  1880. 
To  avoid  misconception,  we  cannot  insist  too  much  upon  tlic 
influence  exercised  over  these  remarkable  fluctuations  by  tlie 
rise  and  fall  in  prices  ;  these,  of  course,  being  very  matciial 
elements  in  determining  the  general  totals  of  imports  and 
exports;  but  even  making  due  allowance  for  the  effect  of  tlie 
changes  in  prices,  these  fluctuations  are  none  the  less  remark- 
able, and  must  be  accepted  as   unmistakable   symptoms  of 
the  economic  situation.     From  the  trade  volumes  of  the  vari- 
ous countries,  wo  find  that  the  value  of  the  foreign  trade  of 
the  United  States  in  1880  exceeded  by  308  million  dollars 
that  of   the   preceding  year.     Great  Britain,  for  the  same 
period,  showed  an  increase  of  seventy-nine  millions  sterling. 
France  482  million  francs,  and  Austro-Hungary  55  million 
florins.     These  four  countries,  then,  will  serve  as  an  illustra- 
tion of  the  increasing  growth  of  economic  power,  having  in 
one  year  alone  raised  the  value  of  the  world's  foreign  trade 
to  tlie  extent  of  about  3,300  million  marks. 

We  will  now  proceed  to  an  examination  of  those  symptoms 
of  economic  progress  which  we  have  designated  above  as 
secondary  symptoms,  and  will  consider  first  the  prices  of 
commodities  and  wages.    The  favorable  period,  comprised 


I 


^s  Si 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


498 


between  1870  and  1873,  was  characterized  by  a  general  rise 
ill  the  prices  of  commodities  and  in  wages,  by  reason  of  the 
demand  for  industrial  power  far  exceeding  the  supply.    If 
we  look  at  the  trade  circulars  of  London,  Hamburg,  and 
New  York,  which  contain  regularly  the  same  staple  commodi- 
ties, we  find  that  the  highest  prices  as  regards  textile  fabrics, 
iron,  tin,  copper,  most  articles  of  food,  and  colonial  produce, 
were  quoted  in  1873  and  1874.    The  tables  published  by  M. 
Bodio,  the  statements  of  Mr.  Gififen  in  the  Commercial  His- 
tory of  the  "  Statist"  (1881),  the  quotations  of  the  New  York 
commercial  papers  and   of   the  Hamburg  lists,  all  point  to 
the  existence  of  this  symptom  in  the  economic   situation. 
Laspcyrcs  has  conclusively  shown  that  at  hardly  any  period 
had  tlie  prices  of  commodities  attained  such  a  high  rate  as 
during  the  year  1871.    The  decline  was  first  apparent  in 
Hamburg  in  1872 ;  in  New  York  and  London,  owing  to  the 
enormous  supply  on  hand,  it  was  experienced  in  1874  or  1875. 
This  decline,  though  gradual  at  first,  began  ra[»idly  to  assume 
larger  proportions,  and  continuing  until  the  middle  or  end  of 
1879,  points  to  the  existence  of  a  distinct  commercial  depres- 
sion.   Laspeyres  states,  on  the  authority  of  Hamburg  quota- 
tions, that  the  fall  in  prices  of  commodities  In  Germany  from 
1873  to  1877  had  been  greater  than  after  an  experience  of 
forty  years  had  been  thought  possible.     As  regards  England 
the  "Economist,"  in  its  annual  review,  gives  a  very  interest- 
ini  statement  showing  the  prices  of  staple  commodities  in 
1870,  as  compared  with  1845-50,  the  years  for  which  the 
index  munber  of  100  may  be  taken.     From  this  it  appears 
that,  taking  twenty-two  categories  whose  total  index  number 
is  orijrinally  2,200,  the  prices  stood  in  1870  at  2,689,  and  in 
1878  had  Increased  to  2,947,  and  declined  in  1879  as  low  as 
-.202;  that  is,  had  fallen  to  the  prices  of  1845-50.    Mr. 
Giffen  points  out  in  an  exhaustive  review  that,  with  but  few 
exceptions,  the  English  heavy  goods  in  the  period  comprised 
I'etweea  1873-79  became  from  26  to  66  per  cent  cheaper.    In 
1878  lower  prices  ruled  than  had  ever  been  quoted  in  London 
since  1850.    M.  A.  de  Foville,  in  a  series  of  comparative  state- 
iients,  gives  some  interesting  details  of  trade  values;  from 


404 


ECONOMIC  HISTORY. 


li 


I  * 


these  we  gather  that  in  1877  the  vahics  of  imports  into  France 
were  14.5  per  cent,  and  of  exports  27.1  per  cent  lower  than 
in  1862.  The  same  decline  was  experienced  everywhere,  and 
it  was  a  period  of  such  universal  commercial  depression  that 
many  industrial  establishments  had  to  forsake  all  branches  of 
their  t  isincss.  Many  important  woollen  firms  in  England  and 
America  failed,  owing  to  the  ruinous  prices  which  i»revailcd. 
The  decline  iii  the  prices  of  coal  and  iron  caused  a  luss  in 
these  industries  in  Great  Britain  of  from  60  to  70  per  cent. 

The  enhancement  of  prices  was  first  observable  in  the 
United  States,  and  was  noticeable  in  the  case  of  pig  iron,  silk, 
and  steel,  at  the  end  of  1878,  and  this  upward  tendency  con- 
tinued till  the  middle  of  1879.    For  example,  Pennsylvania 
pig  iron  rose  in  1878  from  16.5  to  18.5  dollars,  and  in  187? 
from  28  to  32.5 ;  it  continued  to  rise,  until  in  1880  it  attained 
the  average  price  of  88  dollars  per  ton,  approximately  the 
same  rate  as  was  quoted  in  1873 ;  in  the  same  way  the  Glas- 
gow warrants,  which  were  quoted  in  1879  at  40».  per  ton, 
reached  the  high  price  of  73».  in  the  year  1880 ;  and  this 
favorable  impulse  was  not  wholly  confined  to  England  and 
America,  but  was  visible  throughout  the  commercial  world, 
The  twenty-two  goods  categories  of  the  "  Economist,"'  which 
we  mentioned  above,  ascended  from  the  lowest  index  num- 
ber in  1S79;  viz.,  2,202,  in  one  year,  to  2,538,  an  increase  of 
about  16  per  cent.     Heavy  goods,  such  as  wool,  cotton,  yarn. 
twist,  and  manufactures,  experienced  during  the  course  of 
1880  a  still  greater  enhancement  of  prices.    According  to  the 
published  statistics  also  of  Germany,  the  rise  of  wholesale 
prices  in  18S0,  as  compared  with  1879,  was  of  a  more  mark 
character  than  was  apparent  in  the  returns  of  the  majority  of  j 
the  other  European  countries. 

In  connection  with  the  variation  in  prices,  we  ought  at  the  j 
same  time  to  study  the  influence  they  exercised  over  wages. 
These  constitute  an  important  symptom  as  regards  industrial 
condition,  and  are  instrumental  in  determining  tlie  degree  of  j 
the  material  prosperity  of  various  classes  in  the  community  j 
The  old  axiom  of  political  economists,  that  wages  only  fol- 
lowed slowly  in  the  wake  of  prices,  has  of  late  years  suffered 


PliOGRESS  IN  TRADE  AND  IXDUSTRY. 


495 


Tcry  considerable  modifications.    Tho  effect  of  the  sinking^  of 
prices  upon  wages  during  tlie  period  of  depression  between 
1874  and  1878  was  clearly  apparent,  and  the  same  marked 
influence  exercised  by  tho  impulse  given  to  commercial  ac- 
tivity and  the  improvement  of  the  industrial  condition  was 
particularly  noticeable  in  the  augmentation  of  wages  dating 
from  the  year  1879.     It  would  be  impossible  in  this  review  to 
enter  into  minute  details  of  the  fluctuations  during  the  vari- 
ons  periods  of  depression  and  commercial  activity ;  but  to 
show  iiow  high  wages  had  risen  before  the  crisis  of  1873,  we 
may  mention  that  a  special  brand  of  champagne  was  ordered 
fur  tho  Belgian  mining  districts,  and  thousands  of  bottles 
consuuied.    In  England  the  wages  of  coal  miners  rose  from 
4».  9(/.  a  day  in  1871  to  7«.  3i.  in  1873,  and  in  Scotland  to 
6».  67. ;  whereas  in  October,  1878,  these  wages  had  been  re- 
duced to  2«.  9d.  a  day,  a  decrease  to  nearly  one  third.    Fur- 
nace men  who  were  receiving  in  1869  only  Zs.  9d.  a  day,  in 
1872  were  paid  7«.  6d.,  and  in  1873  as  much  as  8».  6i. ;  but 
in  1870  they  had  to  be  content  with  4«.  6t/.,  and  in  1878  with 
only  23.  9i.  a  day.     Puddlcrs  were  in  1868  in  the  receipt  of 
8.^  per  ton,  in  1873  138.  3rf.,  in  1874  11«.  6i.,  and  in  1878-79 
between  la.  and  78.  6tZ.     During  this  latter  period  w*age8  in 
the  textile  industries  also  suffered  a  very  considerable  diminu- 
tion.   For  instance,  in  one  single  year  (1877-78)  the  spinners 
and  weavers  of  northeast  Lancashire  suffered  a  reduction  in 
wages  to  the  extent  of  10  per  cent,  and  tho.se  of  Oldham  15 
percent.    It  lias  been  stated  in  the  "  Times"  that  the  actual 
(litferencc  of  miners'  wages  between  1873  and  1878  amotinted 
toa^i  much  as  twenty-six  millions  sterling.     The  reduction  of 
wages  was  not  confined  to  England  alone,  but  extended  also 
to  America.     We  find  there  that  after  a  period  of  commercial 
prosperity  and  high  wages,  there  ensued  a  time  of  such  un- 
paralleled depression  (in  1876)  in  the  mining  districts  of 
Pennsylvania  that  it  had  the  most  disastrous  results,  one 
being  a  series  of  sanguinary  riots,  which  necessitated  for  a 
time  the  establishment  of  martial  law.    The  statistics  of 
England,  America,  Belgium,  and  Germany,  clearly  show  the 
increase  in  wages  from  the  commencement  of  1880.    Accord- 


1' 

\ 

If ' 

■1        I, 

r 

y 

V. 

1 

496 


ECONOMIC  HISTORY. 


ing  to  the  estimates  of  Mr.  Fallows,  it  would  appear  that  the 
Scotch  miners  in  1879  received  on  an  average  6J.,and  in  1H80 
9(i.  a  day,  more  tlian  they  earned  in  1878.  And  us  rogards 
the  cotton  industries,  wo  gather  from  Ellison's  woll-I<iiuwn 
reports  that  out  of  the  total  value  of  British  production,  in 
1879  only  forty-four  millions  sterling,  while  on  the  otlar 
hand  in  1880  forty-six  millions  sterling  were  put  by  for  wages 
and  prolit.  From  America  we  have  abundant  informatiun  re- 
specting the  increase  of  wages  in  agricultural,  mininj?,  and 
other  industrial  enterprises,  and  these  clearly  show  the  im- 
provement which  had  already  taken  place  in  1880  in  the  in- 
dustrial condition.  According  to  more  recent  statistics  wages 
continued  to  increase  during  the  years  1880-83,  and  again 
declined  in  1884-85. 

We  will  now  turn  to  the  subject  of  the  rates  of  discount,  as 
also  affordinsr  an  indication  of  the  economic  progress.  During 
the  period  1870-79  there  were  very  many  fluctuations  in  the 
rates  of  discount.  The  Bank  of  England,  we  find,  previous 
to  the  commencement  of  the  period  on  which  we  have  made 
our  calculations,  only  changed  its  rate  two  or  three  times,  or 
at  the  most  seven  times  yearly.  In  1870  and  1871  it  was 
altered  ten  times,  in  1872  fourteen  times,  and  in  1873  twenty- 
four  times,  —  in  this  year  the  bank  rate  was  raised  tliirteen 
times.  The  rate  of  discount  stood  during  a  period  of  fifty- 
seven  days  at  6  per  cent,  during  twenty -two  days  at  7  per 
cent,  and  during  thirteen  days  at  8  and  9  per  cent.  The 
Bank  of  France  in  1870  and  1874  changed  its  rate  four  times, 
and  in  the  three  years  1871, 1872,  and  1873,  the  rates  were 
established  at  5  per  cent  for  735  days,  6  per  cent  during  349 
days,  and  7  per  cent  during  twelve  days.  Similar  fluctuations 
were  also  experienced  in  Germany.  In  1874  the  commercial 
depression  commenced  to  be  universally  felt,  and  from  then 
until  the  middle  of  1878  there  were  a  greater  number  of 
changes  in  the  rate  of  interest.  The  Bank  of  England  altered 
its  rate  five  times  during  one  year,  the  Bank  of  France  once 
only,  and  the  rate  was  everywhere  so  reduced  that  it  aver- 
aged —  taking  the  chief  financial  centres,  London,  Paris, 
Amsterdam,  Berlin,  Vienna,  Frankfort,  and  Brussels  —  only 


PliOGRESS  W  TUAVB  AND  INDUSTRY. 


497 


i  appear  that  the 
o6J.,and  in  1880 

And  as  regards 
isoii's  well-known 
ish  production,  in 
lilo  oil  the  otlitr 
B  put  by  for  wat'ts 
lilt  information  re- 
ural,  iiiiiiinKi  ""J 
arly  show  the  im- 

in  1880  in  the  in- 
ent  statistics  wages 
S80-83,  and  again 

ates  of  discount,  as 
c  progress.    During 
fluctuations  in  tlie 
i,  we  find,  previous 
hich  we  have  made 
■0  or  three  times,  or 
0  and  1871  it  ^vas 
and  in  1873  twenty- 
was  raised  tliirtcen 
g  a  period  of  fifty- 
•two  days  at  7  per 
9  per  cent.    Tlie 
its  rate  four  times, 
873,  the  rates  were 
icr  cent  during  349 
[Similar  fluctuations 
j74  the  commercial 
•elt,  and  from  then 
greater  number  of 
of  England  altered 
,nk  of  France  once 
duced  that  it  aver- 
les,  London,  Pai's- 
Ind  Brussels  — on^y 


4.01  |>er  cent  in  1875,  8.52  per  cent  in  187G,  and  3.55  per  cent 
iu  1877.     In  making  up  this  average,  the  higher  rates  which 
prevailed  in  Vienna,  Frankfort,  and  Berlin  (4^  to5i  per  cent) 
arc  taken  into  account,  as  well  as  the  lower  ones  uf  London 
(2.47  per  cent),  Amsterdam  (3  per  cent),  and  Paris  (2.31  per 
cent),  although  these  last  determine  with  greater  accuracy 
the  industrial  position,  as  they  experienced  the  first  fall;  for 
in  18T()  the  bank  rate  in  London  stood  at  2  per  cent  for  255 
day.s,  in  1877  again  for  170  days,  and  it  was  only  towards  the 
end  uf  1877  that  there  was  a  rise.    In  1878  the  Hank  of 
England  rate  of  discount  was  scarcely  more  than  3^  and  4^ 
Iter  cent,  but  in  the  open  markets  short  bills  were  discounted 
at  1^  and  1^  per  cer^t.     In  Paris,  the  rate  was  at  the  most  IJ 
and  \\  per  cent,  and  it  stood  at  2  per  cent  only  once,  in  March, 
and  from  October  to  December  at  2^.    The  rates  at  Berlin, 
Amsterdam,  and  Brussels  exhibited  greater  regularity  iu  their 
fluctuations  between  2J,  3J,  and  4^  per  cent.     The  unproduc- 
tiveness of  floating  capital,  and  the  ab.sencc  of   speculative 
spirit,  cannot  be  said  to  afford  such  unfailing  symptoms  of 
material  prosperity  as  these  fluctuations  in  the  bank  rates. 
To  pursue  our  investigations  still  further,  we  find  that  dur- 
ing tlie  latter  part  of  1878,  and  also  in  1879,  a  greater  os- 
cillation was  to  be  found  than  in  1880 ;  again  the  increases 
in  the  rate  were  also  more  important  in  1878  and  1879  than 
in  1880,  and  clearly  indicated  a  stimulus  which  was  want- 
ing in  1880.     The  alterations  in  the  Bank  of  England  rate 
amounted  in  1878  to  11,  in  1879  to  6,  and  in  1880  to  2  only ; 
but  in  1880,  taking  six  of  the  most  important  linancial  circles 
of  Europe,  these  alterations  only  amounted  to  17,  of  which,  as 
we  liavc  already  shown,  2  occurred  in  London,  3  in  Paris,  5  in 
Berlin,  2  in  Brussels,  3  in  Amsterdam,  and  2  in  Vienna. 
These  symptoms  tend  to  show  that  the  lowering  of  rates  of 
discount  is  a  distinct  voucher  for  the  excess  of  the  supply  of 
lending  capital  over  the  demand.     Economists  agree  in  re- 
garding them   as  indications  of  the  approach  of  a  lasting 
period  of  cheap  money. 

As  regards  investments,  these  are  mainly  dependent  upon 
favorable  or  unfavorable  economic  conditions,  as  during  a 

82 


\T  '  ^  ' 


498 


ECONOMIC  HISTORY, 


i- 


period  of  commercial  prosperity  there  would  naturally  be  a 
larger  amount  of  available  capital  to  invest  than  would  be  the 
case  were  depression  prevailing.  The  amount  of  capital  in- 
vested in  the  formation  of  new  industrial  establishments  and 
various  forms  of  investment  would  afford  an  insight  into  the 
condition  of  the  industrial  position.  It  appears  from  a  state- 
ment in  the  "  Moniteur  des  IntdrSts  Mat^riels  "  in  an  article 
devoted  to  the  consideration  of  the  subject  of  investments, 
that  they  averaged  during  the  ten  years  ending  1879,  6,109 
million  marks,  the  amounts  for  the  years  1871-73  being  very 
considerably  aisove  the  average,  thus  clearly  indicating  the 
existence  of  a  period  of  excessive  speculation.  The  following 
statement  shows  the  amount  invested  each  year,  and  the 
character  of  the  investments :  — 

[MlUioni  omittwl.] 


Tm«. 

In  Bteto  and 
City  Loan*. 

In  Cndit 
Instltutloni. 

In  lUllwayi 
•nd  othtr  In- 
dustrial Bnt«r> 
priMS. 

Total. 

AboTe  or  Mot 

the  DeconnUl 

Arengel. 

Hirkl. 

Mirkt. 

Utrki. 

Mark!. 

1870    .    . 

? 

1 

1 

4660 

—  1649 

1871    .    . 

9860 

1200 

2000 

12660 

. 

-6461 

1872    .    . 

4880 

1664 

4166 

10110 

- 

-4001 

1878    .    . 

8470 

1896 

8856 

8722 

- 

h2613 

1874    .    . 

1268 

236 

1864 

8868 

—  2741 

1876    .    . 

872 

860 

646 

1308 

—  4741 

187«    .    . 

2366 

66 

498 

2920 

—  3189 

1877    .    . 

4618 

820 

1384 

6822 

4-   218 

1878    .    . 

2896 

126 

622 

8644 

-2466 

1879    .    . 

4406 

1902 

1212 

7620 

+  1411 

1880    .    . 

1747 

1035 

1644 

4420 

—  1683 

1881    .    . 

2895 

1033 

2316 

6743 

—   366 

1882    .    . 

1076 

409 

2266 

8740 

—  2369 

1883    .    . 

1263 

374 

1741 

8368 

-  m\ 

1884    .    . 

1446 

818 

2193 

8P57 

—  2152 

1885    .    . 

1181 

161 

1882 

2664 

—  8446 

m 
It 

I 


In  this  comparison  the  proportion  of  investments  in  credit 
institutions,  banks,  railway  and  industrial  enterprises,  to  public 
loans  is  of  special  significance,  and  we  therefore  present  it 
by  per  centage  in  the  following  table :  — 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


499 


lid  naturally  be  a 
than  would  be  the 
aunt  of  capital  in- 
istablishmeuts  and 
m  insight  into  the 
ipears  from  a  state- 
iels,"  in  an  article 
jct  of  investments, 
ending  1879,  6,109 
1871-73  being  very 
arly  indicating  the 
ion.    The  following 
jach  year,  and  the 


Total. 


M»rhi. 

4660 
12660 
10110 
8722 
8868 
1868 
2920 
6822 
8644 
7620 


Abow  or  below 

the  DectnoUl 

Arengei' 


4426 
5743 
8740 


—  1649 
+  6461 
4-4001 
+  2613 

—  2741 

—  4741 

—  3189 
+   218 

—  2465 
+  1411 


8P67 
2664 


—  1683 

—  366 

—  2369 

—  •^"41 

—  2152 

—  3445 


Ivestments  in  credit 
bnterprises,  to  public 
tierefore  present  it 


Poblie 

Credit 

lUilwmyi, 

Tmm. 

Publie 

Credit 

Railumja, 

LoanB. 

InatituUoDi. 

etc. 

Loani. 

Inatitutioni. 

etc 

Percent 

Per  cent. 

Percent. 

Percent. 

Per  eetU. 

Percent. 

1871.    . 

74'6 

95 

160 

1870    . 

58-75 

2525 

160 

1872.    . 

48-6 

165 

410 

1880    . 

39-45 

28  38 

3717 

1873.    . 

400 

160 

440 

1881    . 

41-70 

17-99 

40-34 

1874.    . 

380 

70 

66-0 

1882    . 

28-74 

10-93 

60-31 

1875.    . 

276 

26-75 

46-75 

1883    . 

87-20 

1110 

6180 

1876.    . 

80-76 

2-25 

170 

1884    . 

86-54 

803 

6543 

1877.    . 

7326 

50 

21-75 

1885    . 

44-33 

6-67 

6000 

1878.    . 

7925 

3-60 

1725 

Here  we  perceive  that  in  the  early  period  of  speculation 
private  enterprises,  and  in  the  subsequent  period  of  depres- 
sion public  loans  received  the  larger  proportion  of  invest- 
ments. After  the  revival  in  1879  the  relation  between  these 
two  classes  of  investments  is  once  more  reversed,  especially 
for  the  year  1882 ;  on  the  other  hand,  since  that  date  there 
would  appear  again  to  be  an  increase  of  public  loans. 

In  the  invested  capital  for  the  same  period  of  the  several 
individual  countries,  peculiarities  similar  to  those  which  char- 
acterize the  preceding  tables  are  likewise  to  be  found.  Of  cap- 
ital invested  in  the  English  market,  the  "  Economist "  gives 
the  following  statement :  — 


Tear*. 

Nominal. 

Actual. 

Tean. 

Nominal. 

Aetnal. 

Million  £. 

MUlion  £. 

MUlion  £. 

MUlion  £. 

1870    .... 

92-26 

8000 

1879  .... 

56-47 

47-46 

1872 

161-66 

11310 

1880  . 

122  20 

7760 

1873 

164-70 

101-16 

1881   . 

189-40 

115  26 

1874 

11415 

110  55 

1882   . 

14565 

94  66 

1875 

62-65 

6086 

1888   . 

8115 

76'90 

1876 

4320 

4286 

1884   . 

109-03 

00  60 

1877 

6150 

38-60 

1885  . 

77-97 

77-87 

1878 

50-20 

60-40 

1 

These  figur«'»«i  may  be  taken  as  more  strictly  accurate  than 
those  affecting  the  total  investments,  as  they  relate  only  to 
&  single  stock  market ;  they  indicate,  moreover,  the  increase 
of  invested  capital  up  to  the  year  1874,  the  decrease  from 
this  period  till  1878,  and  the  rapid  recovery  since  1879 ;  like- 


500 


ECONOMIC  HISTORY. 


V 


■1     ;  I' 


wise  the  character  of  the  recent  phase  from  1881  to  1885. 
This  statement  is  the  more  interesting,  as  we  can  estimate 
very  nearly,  by  the  proper         etween  the  nominal  and  effect- 
ive capital,  whether  the  i       -cments  were  of  a  purely  specu- 
lative or  real  character.     »..  France,  capital  invested  during 
the  first  six  months  of  1879  amounted  to  only  350  million 
francs,  as  compared  with  1,748  million  francs  in  the  corre- 
sponding period  of  1880.     For  the  whole  year,  ending  30th 
June,  1880,  it  amounted  in  round  numbers  to  4,000  million 
francs,  and  this  is  exclusive  of  the  Belgian,  Austrian,  and 
Russian  loans,  which  were  not  directly  floated  on  the  Parisian 
market.     There  were  established  in  Paris,  in  the  year  1881, 
432  new  companies,  with  1,929  million  francs  of  capital;  in 
the  year  1882,  328  companies,  with  798  million  francs;  in  the 
year  1883,  230  companies,  with  251.5  million  francs;  and 
in  the  year   1884,  only  143   companies,  with   91.9  million 
francs.     In  Germany  during  the  first  half  of  1879,  capital  to 
the  extent  of  only  142  million  marks  was  invested,  against 
659  million  marks  in  the  corresponding  period  of  tlie  ensuini: 
year,  of  which  twenty-five  million  marks  only  were  in  railways 
and  other  companies,  and  the  remainder  in  foreign  loans.    In 
Austria  it  is  estimated  that  the  total  amount  of  invested  cap- 
ital in  1880  was  only  170  million,  florins,  compared  with  2T1 
million  florins  in  1879 ;  but  great  stress  is  here  laid  upon  the 
fact  that,  after  a  lengthened  period  of  inaction,  in  1880  money 
was  for  the  first  time  largely  invested  in  railways  and  commer- 
cial enterprises,  in  preference  to  foreign  loans,  —  the  amount 
represented  by  the  former  being   fifty-four  million  florins. 
Thus,  as  may  be  gathered  from  the  preceding  observations, 
statistics  of  invested  capital  afford  an  important  symptom  of 
greater  or  less  commercial  activity. 

Again  we  can  discover,  by  reference  to  financial  journals, 
the  fluctuations  which  have  appeared  in  the  dividends  paid 
by  railways  and  other  commercial  enterprises.  The  influence 
of  good  and  bad  years  exercised  over  these  dividends  is  clearly 
shown  in  the  comparative  statements  which  they  have  from 
time  to  time  published.  For  example,  the  depreciation  of 
foreign  stocks  on  the  London  Exchange  amounted  in  Julji 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


501 


1873,  to  49.2  millions  sterling ;  and  in  October,  1875,  the  loss 
was  estimated  by  the  Foreign  Loan  Committee  of  the  Stock 
Excliange  to  amount  to  as  much  as  157.8  millions  sterling. 
There  was  in  addition  the  loss  by  the  joint-stock  banks,  four- 
teen of  which  alone,  in  1878,  suffered,  according  to  the 
"  Economist,"  a  diminution  in  the  value  of  their  stock  of  ten 
million  pounds  sterling.  As  regards  the  chief  industrial  estab- 
lishments of  England  it  is  admitted  that  the  depreciation  in 
the  shares  of  the  cotton  spinning  and  weaving  industries  of 
Oldham  fi'om  January,  1877,  to  1879,  represented  a  total  loss 
of  £1,300,000.  Tlie  foregoing  figures,  however,  convey  only 
an  approximate  idea  of  the  general  loss  of  capital  in  Great 
Britain  and  Ireland,  the  actual  extent  being  statistically  un- 
ascertainable.  In  1880,  on  the  other  hand,  a  decided  improve- 
ment took  place  in  the  United  Kingdom,  which,  when  compared 
with  the  period  of  depi'ession  of  1879,  is  all  the  more  clearly 
marked.^ 

As  Mr.  Giffen  points  out  in  the  Financial  and  Commercial 
History  of  1880,  published  in  the  "  Statist,"  the  increase  of 
selling  value  of  the  mass  of  securities  in  the  United  King- 
dom would  probably  amount   to  not  less  than  600  millions 
sterling.    In  the  United  States  the  loss   in  railway  shares, 
from  1873  to  1877,  amounted  to  nearly  one  milliard  of  dollars, 
but  the  improvement  which  took  place  after  September,  1879, 
to  a  great  extent  made  up  this  loss,  as  in  May,  1880,  it  was 
already  reduced  to  200  million  dollars,  and  was  soon  after- 
wards almost  entirely  removed.     A  similar  improvement  in 
the  value  of  securities  was  also  to  be  found  in  the  case  of 
Austria.    There  it  appeared  that  the  value  of  the  different 
description  of  securities,  which  amounted  in  1873  (May)  to 
\M  million  florins  fell  to  755  in  1876;  in  1877  it  was  only 
i^TD,  and  in  1878,  906  million  florins  ;  but  a  steady  improve- 
ment then  set  in,  until  in  1880  the  total  increase  in  the  value 
of  all  securities  amoimted   approximately   to   800    million 
florins.    This  favorable  tendency  continued  in  both  countries, 
as  in  Groat  Britain,  until   the  close  of  1881,  after  which  a 
general  decline  in  securities  took  place  until  1885. 
1  See  "  Statist,"  Dec.  11,  1880,  for  full  details. 


Bit 'A 


if'S'"^- 


11' i 


502 


ECONOMIC  HISTORY. 


1         .-M 


t 


\'i  < 


Hi 


Statistics  of  bankruptcies  and  failures  may  likewise  be 
taken  as  unfailing  symptoms  of  the  industrial  position.  But 
our  information  as  regards  this  subject  is  by  no  means  com- 
plete, owing  to  the  scarcity  of  official  data.  The  following 
table,  which  has  been  carefully  compiled  by  R.  Seyd,  serves, 
however,  to  indicate  the  economic  phases  from  1870-1884  in 
the  United  Kingdom  by  the  number  of  failures :  — 


Tears. 


1870 
1871 
1872 
1878 

1874 
1876 
1876 
1877 


Nnmber. 


8,161 
8,164 
8,112 
0,064 
9,260 
9,194 
10,848 
11,022 


Tean. 


1878 
1879 
1880 
1881 
1882 
1883 
1884 
1886 


Number. 


15,059 
10,63: 
13,147 
12,005 
11,019 
10,599 
'4,394 


It  is  noteworthy  that  the  extreme  depression  of  the  large 
industries  in  Great  Britain  was  already  relieved  in  1878, 
whereas  of  the  smaller  trades  not  until  1879.  As  regards  the 
United  States  the  periods  of  commercial  activity  and  of  depres- 
sion are  clearly  perceptible  in  the  statistics  of  failures  pub- 
lished by  Messrs.  Dun,  Wiman,  «&  Co.  According  to  these 
returns,  the  smallest  number  of  "failures  in  the  Uniou  is  to  be 
found  in  the  years  1869-1872 ;  a  depression  begins  in  the 
latter  half  of  187^,  which  steadily  increases  until  1878 ;  and 
the  years  1879-1881  witness  a  genuine  revival.  The  yearly 
average  of  the  number  of  failures,  and  tlie  amount  of  liability, 
in  the  different  periods  is  as  follows :  — 


Tearly  ATerage. 


1866-1872 
1873-1878 
1879-1884 


Amount  of 
Liabilitie.<. 


$83,000,01)0 
200,000.0^ 
124,000,0110  j 


»  The  years  1884  and  1886  cannot  be  compared  with  the  preceding  yean.  | 
owing  to  tlie  enactment,  on  26tli  Aug.,  1883,  of  a  new  and  more  stringent  lack 
ruptcy  act. 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


503 


may  likewise  be 
al  position.  But 
)y  no  means  com- 
t.  The  following 
•y  R.  Seyd,  serves, 
om  1870-1884  in 
ires :  — 


1                            Number. 

16,059 
10,637 
13,147 
12,005 
11,019 
10,599 
14,394 
6,089 

cession  of  the  large 
relieved  in  18T8, 
79.   As  regards  the 
tivity  and  of  depres- 
;ic8  of  failures  pub- 
According  to  these 
1  the  Union  is  to  be 
ision  begins  in  the 
ics  until  1878;  and 
evival.    The  yearly 
amount  of  liability, 


Number  of 
Failures. 


2,889 
7,886 
7,311 


Amount  of 
Liabilities 


$83,000,W) 

200,000.0^ 
124,000,OW  ] 


with  the  preceding  y««^ 

and  more  stringent  bank- 1 


In  France  the  movement  is  not  so  strikingly  accentuated,  as 
that  country  was  less  affected  by  the  crisis  of  1873 ;  yet  the 
fluctuations  were  considerable.  Thus  in  1872  the  number  of 
declared  bankrupts  amounted  to  5,306,  and  the  extent  of  their 
failures  was  represented  by  a  total  of  215  million  francs  ;  in 
1873,  5,508,  liabilities  218  millions;  in  1874,  5,596,  liabil- 
ities  241  millions ;  in  1875,  5,361,  liabilities  246  millions,  and 
in  1876,  5,193,  liabilities  298  millions.  It  was  not  until  1877 
that  any  real  improvement  was  visible ;  and  in  1881,  though 
there  were  6,795  failures,  the  amount  of  liabilities  was  only 
'236  million  francs.  Finally,  in  Austria,  according  to  the  pub. 
lished  returns,  the  number  of  insolvents  in  1875  was  1,381 ;  in 
1876, 1,777;  in  1877,  1,377;  in  1878, 1,334;  in  1879, 1,048; 
and  in  1880  only  971  failures.  The  amount  of  debt  in  1876 
was  established  at  nearly  twenty-six  million  florins ;  in  1877 
at  thirteen  millions,  and  in  1878  at  about  fourteen  millions. 

The  intimate  connection  between  the  economic  and  social 
conditions  demands  no  extended  proof.  The  bonds  of  union 
between  these  two  phases  of  life  are  so  numerous  that  we 
proceed  directly  to  a  statistical  presentation  of  a  series  of 
phenomena  which  we  have  termed  reflective  symptoms,  inas- 
much as  they  reveal  the  reactions  of  a  greater  or  lesser  degree 
of  economic  prosperity  in  a  nation  or  period. 

We  here  look  first  into  the  condition  of  the  working  classes, 
and  we  find  that  during  the  favorable  period,  1870-73,  com- 
plaints of  want  of  employment  were  almost  unknown,  whereas 
the  demand  for  labor,  on  the  contrary,  was  great  and  wages 
were  high ;  but  in  1874  there  came  a  change,  the  hours  of 
labor  were  reduced,  and  workmen  were  discharged  in  great 
numbers.  This  was  particularly  exemplified  in  the  years 
18'G-77,  when  the  conditions  of  trade  were  most  unfavorable, 
and  it  was  especially  noticeable  in  England  and  the  majority 
of  the  continental  countries.  In  America,  moreover,  in  the 
beginning  of  1877,  it  is  estimated  that  the  number  of  work- 
men totally  unemployed  amounted  to  half  a  million,  and 
about  an  equal  number  worked  only  one  or  two  days  a  week. 
At  the  end  of  1877  the  trades  union  committee  gave  the  num- 
ber of  unemployed  workmen  as  two  millions.    These  com- 


W:l 


504 


ECONOMIC  HISTORY. 


1%     ■    -J 


t  ,| 


plaints  began  to  cease  about  the  middle  of  1879,  first  in  the 
United  States  and  soon  afterwards  in  England  and  Western 
Europe.  From  the  data  respecting  the  condition  of  labor 
in  mining,  textile,  and  other  industries  for  1880  it  may  be 
safely  affirmed  that  the  state  of  labor  had  then  everywhere 
again  materially  improved.  In  the  American  Union,  in  par- 
ticular, there  was  a  great  demand  for  laborers,  which  contin- 
ued throughout  the  years  1881-83,  and  then  again  declined. 

Strikes,  likewise,  afford  a  characteristic  symptom  of  the 
"tate  of  the  labor  market,  not  only  by  their  numbers  and 
du>aUoii,  but  also  by  the  manner  in  which  they  terminate, 
wh'  ii:er  in  favor  of  the  employers  or  the  employed.  On  this 
genera!  i- 'bject  English,  American,  French,  and  Belgian  sta- 
tis'-'cs  ah 
Ml    cJ.  i't 

a  compaiaiive  btatement,  as  follows,  showing  the  number  of 
strikes  which  took  place  in  the  years  1870-79 :  — 


iiluable  information.   As  regards  Great  Britain, 
i  ■  r.  an,  in  a  very  interesting  report,  has  given 


Years. 

Number  of 
Strikes. 

Tem. 

Number  of 
Striku. 

1870 

80 

1875 

245 

1871 

08 

a876 

229 

1872 

343 

1877 

180 

1873 

365 

1878 

268 

1874 

286 

1870 

308 

The  greatest  number  of  strikes  during  this  period  occurred 
in  1872-73,  and  happened  at  a  time  when  industry  was  at  its 
highest.  There  was  then  a  very  large  demand  for  labor,  and 
a  great  inflation  in  prices,  and  although  men  were  getting 
good  wages,  yet  they  were  not  satisfied.  Though  the  gener- 
ality of  tliem  were  earning  more  tlian  they  had  ever  earned 
before,  they  struck  for  a  reduction  of  working  houi's.  This  was 
the  reason  for  very  many  of  tlie  strikes  which  occurred  at  that 
time.  The  effort,  on  the  other  hand,  of  tlie  masters  to  win 
back  tlie  extra  hour  they  were  obliged  to  concede  in  1872-73, 
affords  an  explanation  of  the  large  number  of  strikes  in  1879. 
In  that  year  the  greatest  number  of  strikes  occurred  in  the 
building  trade  (598),  the  metal  trades  (390),  mining  indus- 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


505 


879,  first  in  the 
id  and  Western 
dition  of  labor 
1880  it  may  be 
;hen  everywhere 
I  Union,  in  par- 
's, which  contin- 
gain  declined, 
symptom  of  the 
ir  numbers  and 
they  terminate, 
ployed.    On  this 
and  Belgian  sta- 
ds  Great  Britain, 
report,  has  given 
ig  the  number  of 
9:  — 


Number  of 
Strikea. 


245 
229 
180 
268 
308 


is  period  occurred 
dustry  was  at  its 
,nd  for  labor,  and 
nen  were  getting 
jough  the  gcner- 
had  ever  earned 
hours.    This  was 
I  occurred  at  that 
masters  to  win 
icedc  in  1872-73, 
►f  strilces  in  18'^- 
,  occurred  in  tlie 
),  mining  in^us- 


e 


tries  (339),  and  textile  industries  (440),  which  establishes  be- 
yond a  doubt  their  symptomatic  connection  with  the  economic 
situation.  The  improvement  in  the  economic  condition,  and 
the  extension  of  raw  production,  increased,  beyond  what  could 
otherwise  have  been  expected,  the  demands  fur  higher  wages, 
and  the  number  of  striices  in  1881-82.  In  America,  as  well 
as  in  England,  the  years  in  which  the  activity  in  commercial 
enterprises  was  greatest,  were  characterized  by  the  largest 
number  of  strikes,  —  for  example,  1871-72.  During  this 
period  there  was  a  cessation  of  work  in  the  anthracite  coal 
mines  of  Pennsylvania,  by  which  90,000  workmen  were  put 
on  half  time.  Strikes  in  the  coal  regions  continued,  indeed, 
in  the  years  1874  and  1875;  but  the  second  period  of  their 
occurrence  in  remarkable  numbers  was  not  reached  until 
1876-77.  This  was  a  period  of  great  distress,  during  which 
wages  were  reduced,  and  hands  were  discharged.  Tliere 
resulted  in  consequence  one  of  the  most  unfortunate  strikes 
that  ever  took  place  in  America.  It  occurred  in  the  State  of 
Pennsylvania,  and  culminated  in  open  revolt  and  bloodshed. 
Then  followed  the  strike  on  the  Baltimore  and  Ohio  Rail- 
way, which  was  also  of  a  very  serious  nature.  From  1870 
to  1880  the  social  tension  was  again  relaxed ;  and  with  the 
revival  in  the  years  1881  and  1882  the  strikes  also  increased, 
especially  among  the  laborers  in  the  coal  mines,  iron  works, 
and  kindred  industries  of  the  Southeast.  Both  at  this  time 
and  in  1883  the  ends  of  the  workmen  were  thereby  attained. 
In  1884  and  1885,  however,  the  strikes  in  America  have  been 
chiefly  characterized  by  their  futility.  In  Franco,  Belgium, 
and  Germany  similar  symptoms  of  the  economic  situation 
are  not  lacking,  but  they  appear  in  a  less  marked  degree. 
The  recent  phases  of  socialism  and  social-communism  in  those 
countries  are  an  expression  of  the  changing  situation  and  a 
reflex  of  their  economic  condition.  With  the  improvement  of 
the  latter  the  influence  of  socialistic  leaders  must  diminish. 

In  connection  with  the  subject  of  strikes  and  workmen's 
wages  we  must  not  omit  to  give  a  passing  glance  at  the  effect 
which  the  peculiar  conditions  of  the  labor  market  have  upon 
immigration  and  emigration.    In  consequence  of  the  increased 


506 


ECONOMIC  HISTORY. 


w-'rm 


i: 


l/r.;    I 


mr 


c 

I 
■..■;'; 

1 

3      ^ 

l^^^^l 

n 

facilities  for  emigration  this  is  a  subject  which  has  attained 
a  vast  importance,  and  may  be  classed  as  one  of  the  relevant 
symptoms  of  the  economic  position.  The  great  centre  of  at- 
traction for  those  leaving  the  more  densely  populated  of  the 
European  countries  appears  to  be  the  United  States.  As  we 
have  already  pointed  out  there  have  been  very  many  changes 
in  the  conditions  of  commercial  activity  during  the  period 
under  our  consideration.  The  effect  these  changes  have  had 
upon  immigration  into  the  United  States  may  first  be  seen  in 
the  speculative  era  from  1871  to  1873,  when  there  was  a  very 
great  influx  of  immigrants.  Then  in  1874-78  the  powerful 
attractions  which  induced  such  vast  numbers  to  migrate  were 
wanting;  consequently  we  find  at  that  time  a  considerable 
decrease  in  these  numbers.  In  1879,  with  the  return  of  pros- 
perity, there  again  appeared  an  increase  in  immigration.  This 
attained  its  maximum  in  1881-82,  after  which  occurred  a 
decline,  owing  to  the  diminishing  opportunities  of  labor  and  a 
more  critical  state  of  affairs  in  the  New  World.  The  official 
statistics  of  the  movement  are  as  follows :  — 


Yean  Ending  SOtb  June. 

Number  of 
InmigranU. 

Teara  Ending  80th  June. 

Number  of 
ImmignuiM. 

1870-71  . 
1871-72  . 
1872-78  . 
1873-74  . 
1874-75  . 
1876-76  . 
1876-77  . 
1877-78  . 

321,360 

404,806 
460.803 
813,339 
227,498 
169,986 
141,857 
138,469 

1878-79 
1879-80 
1880-81 
1881-82 
1882-83 
1883-84 
1884-85 

177,826 
457,257 
669,431 
788,992 
603,322 
618,692 
395,346 

In  this  stream  of  American  immigration  the  largest  num- 
ber of  persons  is  uniformly  supplied  by  Germany,  and  next 
to  it  by  Great  Britain  and  Ireland.  By  reference  also  to 
the  emigration  returns  of  the  other  European  countries  we 
discover  a  uniformity  of  movement  in  corresponding  years 
that  can  only  be  explained  upon  similar  economic  grounds. 
According  to  these  statistics  it  can  thus  be  affirmed  in  gen- 
eral of  Europe,  as  has  been  demonstrated  by  Mr.  Giffen  for 
Great  Britain  in  particular,  that  an  increase  of  emigration 


PROGRESS  IN  TRADE  AND  INDUSTRY. 


607 


is  to  be  regarded  as  characteristic  of  a  period  of  economic 
prosperity,  and  the  reverse  as  indicative  of  a  period  of 
economic  depression. 

Another  and  very  interesting  symptom  of  the  conditions  of 
material  prosperity  lies  in  the  movement  (Bewcgung)  of  the 
population.    The  variations  in  the  number  of  births,  deaths, 
and  marriages  afford  clear  indications  of  the  favorable  or  im- 
favorable  conditions  of  the  years  in  which  they  occur.    Mar- 
riages especially  would  appear  to  be  a  most  important  element 
in  determining  the  economic  condition  in  different  years.    It 
will  readily  be  conceded  that  an  increase  or  decrease  in  the 
number  of  these  point  conclusively  to  the  existence  of  mate- 
rial ease  or  the  reverse.    In  dealing  with  this  subject  for  the 
assigned  period  we  find  that  the  years  1870-73  were  char- 
acterized by  a  very  marked  increase  in  the  number  of  mar- 
riages, thereby  indicating  the  existence  of  favorable  conditions 
and  confidence  in  a  time  of  increased  prosperity.    This  in- 
crease was  particularly  noticeable  in  Great  Britain,  Germany, 
France,  Belgium,  Austro-Hungary,  and  Holland.    With  the 
unfavorable  reaction  of  1873  and  1874,  on  the  other  hand,  the 
number  of  marriages  in  all  these  countries  began  to  decrease. 
In  Italy,  Switzerland,  Norway,  and  Denmark,  the  economic 
reaction  was  likewise  similarly  manifested ;  but  corresponding 
to  a  later  maximum  in  the  frequency  of  marriages,  the  de- 
crease occurred  not  until  1877-78.     At  the  close  of  1879 
increasing  confidence  was  here  and  there  again  slightly  per- 
ceptible in  the  number  of  marriages.     In  their  greater  fre- 
quency, however,  during  the  years  1880  and  1881,  in  England, 
France,  Austria,  and  Italy,  we  discover  decided  and  powerful 
symptoms  of  the  improved  economic  and  social  conditions. 
In  tlie  United  States,  where  as  a  whole  this  relation  ought  to 
be  most  apparent,  it  is  only  to  be   proven  statistically  in 
particular  States;   but  this  detached   evidence  from  Massa- 
chusetts, Connecticut,  and  Rhode  Island,  shows  the  most  strik- 
ing ofTfects  of  the  changing  prosperity  of  the  last  twelve  years 
upon  the  frequency  of  marriages.     The  favorable  and  unfavor- 
able conditions  of  life  are  not  so  strikingly  manifested  in  the 
"movement"  of  population  as  regards  births  and  deaths  as  in 


508 


ECONOMIC  HISTORY. 


111' 


the  case  of  marriages.  In  the  births,  however,  a  considerable 
diminution  is  to  bo  found,  beginning  with  the  year  1877  or 
1878  and  continuing  until  the  year  1881  or  1882.  In  tho 
majority  of  European  countries  the  death  rate  was  likewise 
highest  in  those  years  in  which  the  birth  rate  was  lowest. 
The  years  of  depression  thus  appear  not  to  have  seriously 
affected  at  the  time  the  entire  growth  of  the  population,  but 
the  after  effects  were  undoubtedly  felt  in  1879-80.  The  crisis 
of  1873,  however,  had  a  direct  and  unmistakable  influence  on 
the  number  of  suicides.  M.  Jochnick  states  that  in  twenty-two 
European  countries  the  number  of  suicides  increased  from  99 
in  every  million  of  Inhabitants  during  the  quinquennial  period 
1871-75  to  119  per  million  in  the  period  1876-80.  M.  A.  von 
Oettiugen,  taking  another  group  of  twenty  European  countries, 
gives  also  the  following  statement  of  the  increase  of  suicides 
in  successive  quinquennial  periods  between  1870  and  1878  :  — 


T««n. 


1870-1874 
1B71-1875 

1H72-1876 
1873-1877 
1874-1878 


Number 

of 
Suicides, 


20,306 
20,208 
21,638 
23,654 
24,910 


Proportion 
per  Million 
iDhubitanta. 


80 
80 
85 
92 
97 


The  fact,  however,  must  not  be  overlooked  that  statistics  re- 
lating to  suicides  must  necessarily  be  incomplete,  as  on  this 
subject  it  Is  almost  impossible  to  obtain  reliable  data,  owing  to 
omissions.  Statistics  of  mendicity  and  crime  likewise  afford 
abundant  proof  that  good  and  bad  times  make  their  influence 
felt  in  a  very  perceptible  manner  in  the  domain  of  social  life. 
They  are  consequently  an  additional  and  corroborative  symp- 
tom of  economic  progress  or  retrogression. 

It  is,  then,  by  all  the  symptoms  which  we  have  enumerated 
that  we  have  endeavored  to  estimate  the  world's  prosperity; 
and  these  have  unquestionably  proved  that  in  the  period  from 
1870  to  1885  economic  conditions  have  been  exposed  to 
greater  and  more  varying  fortunes  than  they  had  ever  before 


PROGRESS  IN   TRADE  AND  INDUSTRY. 


509 


i  considerable 
year  1877  or 
1882.    Ill  the 
)  was  likewise 
;e  was  lowest, 
tiave  seriously 
jopulation,  but 
80.    Tlie  crisis 
le  influence  on 
t  in  twenty-two 
reased  from  99 
juennial  period 
80.     M.  A.  von 
)pean  countries, 
saso  of  suicides 
'0  and  1878:- 


imber 
of 
licldes. 


0,306 

208 

,638 

3,654 

4,910 


Proportion 
per  Million 
iDhubitaute. 


80 
80 
85 
92 
97 


lat  statistics  re- 
)lete,  as  on  this 
e  data,  owing  to 
likewise  afford 
their  influence 
in  of  social  life. 
•oborative  symp- 

ave  ennmerated 

Id's  prosperity; 

Ithe  period  from 

^en  exposed  to 

fhad  ever  before 


experienced.  At  the  commencement  of  the  period  there  were 
unmistakable  signs  of  an  increase  in  wealth  almost  without 
parallel  in  commercial  annals;  afterwards  for  a  number  of 
years  there  were  apparent  a  sensible  decline  in  wealth  and 
an  enormous  reduction  of  profit ;  and  again,  dating  from 
the  middle  of  1879,  there  were  signs  of  renewed  commercial 
activity,  a  fresh  impetus  was  given  to  trade,  investments  were 
found  for  capital  hitherto  unemployed,  workmen  were  in 
greater  demand,  wages  were  good,  a  very  marked  improve- 
ment was  to  be  seen  not  only  in  the  European  but  also  on  the 
American  exchanges,  and  in  fact  there  was  a  general  revival 
in  all  branches  of  trade  and  industry.  This  revival  continued 
until  the  close  of  1882  or  the  middle  of  1883,  after  which 
economic  symptoms  again  indicated  a  period  of  depression 
for  1881  and  1885.  The  recent  vears  of  economic  advance 
must  be  a  convincing  proof  to  those  pessimists  who  took  such 
a  desponding  view  of  the  situation,  that  their  fears  as  to  the 
ultimate  improvement  in  material  prosperity  were  altogether 
groundless.  Who  is  there  who  still  believes  in  the  hypothesis 
that  the  depression  of  1874-78  marked  the  termination  of 
commercial  and  industrial  prosperity  ?  Who  now  believes 
that  the  crisis  of  1873  marked  a  new  era,  and  that  the  highest 
point  which  improvements  in  trade  and  industry  could  reach 
had  been  attained  ?  Who  in  like  manner  will  now  share  the 
pessimist  view  of  the  present  depression  tliat  in  the  future  a 
very  great  decrease  of  prosperity  is  to  be  looked  for  before  the 
increase  is  to  be  expected  ?  Past  experience  must  give  ground 
for  ciwiiidcnce  in  a  new  revival  in  the  economic  life  of  the 
present,  and  in  a  still  greater  increase  of  i)ro8perity  for  the 
future.  Who  can  predict  what  wonderful  inventions  may  yet 
he  in  store  for  us,  —  what  improvements  electricity,  for  in- 
stance, may  effect  in  the  future  ?  Who  can  gainsay  the  im- 
provements which  are  continually  being  brought  to  bear 
upon  machinery  ?  In  looking  at  the  wonderful  strides  with 
which  cultivation  and  improvement  have  been  advancing, 
who  can  fail  to  be  impressed  with  a  sense  of  their  vast- 
ness  and  of  their  very  great  importance  ?  All  these  point 
to  the  inauguration  of  a  new  and  even  brighter  era  in  econ- 


fi.,,.  i 


hi 


W 


,i  i.'^' 


610 


ECONOMIC  HISTORY. 


omic  life.  And  although  we  arc  of  the  opinion  that  the 
characteristics  of  the  ensuing  economic  period  may  differ  ma- 
terially from  those  which  marked  the  preceding  o'  "<)t  after 
a  patient  study  of  the  facts  in  connection  with  present 

situation,  we  can  by  no  means  look  forward  to  a  period  of  con- 
tinued depression.  While  it  may  readily  be  concluded  from 
the  symptoms  of  the  existing  depression  that  the  next  revival 
is  not  to  be  expected  with  great  precipitancy,  yet  the  more 
slowly  and  more  gradually  the  disturbed  equilibrium  between 
production  and  consumption,  between  prices  and  wages,  and 
between  interest  upon  capital  and  profits  of  investments  is 
adjusted,  so  much  the  greater  is  the  guarantee  for  the  perma- 
nent consolidatiou  of  oconomic  life. 


y.-if. 


APPENDICES. 


I. 


LEADING  SECTIONS  FROM  THE  ENGLISH  NAVIGA- 
TION ACTS. 


Act  of  1660,  12  Car.  II.,  c.  18. 

An  Act  for  the  Encouraging  and  Increasing  of  Shipping  and 

Navigation. 

For  the  Increase  of  Shipping  and  Encouragement  of  the  Naviga- 
tion of  this  Nation,  wherein,  under  the  good  Providence  and  Pro- 
tection of  God,  the  Wealth,  Safety,  and  Strength  of  this  Kingdom 
is  80  much  concerned;  (2)  Be  it  enacted  by  the  King's  most  Ex- 
cellent Majesty,  and  by  the  Lords  and  Commons  in  this  present 
Parliament  assembled,  and  by  the  Authority  thereof,  That  from 
and  after  the  first  day  of  December,  one  thousand  six  hundred  and 
sixty,  and  from  thenceforward,  no  Goods  or  Commodities  whatso- 
ever shall  be  imported  into  or  exported  out  of  any  Lands,  Islands, 
Plantations,  or  Territories  to  his  Majesty  belonging  or  in  his  Pos- 
session, or  which  may  hereafter  belong  unto  or  be  in  the  Possession 
of  his  Majesty,  his  Heirs  and  Successors,  in  Asia,  Africa,  or  Amer- 
ica, in  any  other  Ship  or  Ships,  Vessel  or  Vessels  whatsoever,  but 
in  such  Ships  or  Vessels  as  do  truly  and  without  Fraud  belong  only 
to  the  People  of  England  or  Ireland,  Dominion  of  Wales,  or  Town 
of  Berwick  upon  Tweed,  or  are  of  the  Built  of  and  belonging  to 
any  the  said  Lands,  Islands,  Plantations,  or  Territories  as  the  Pro- 
prietors and  right  Owners  thereof,  and  whereof  the  Master  and 
three-fourths  of  the  Mariners  at  least  are  English;  .  .  . 

III.  And  it  is  further  enacted  by  the  Authority  aforesaid, 
That  no  Goods  or  Commodities  whatsoever,  of  the  Growth,  Fro- 


512 


ECONOMIC  HISTORY. 


If       i^ 


duction  or  Manufacture  of  Africay  Asia,  or  America,  or  of  any 
Part  thereof,  or  whicli  are  (lescribed  or  laid  down  in  the  usual 
Majis  or  Canla  of  those  IMacea,  be  imported  into  England,  Ireland, 
or  Wales,  Islands  of  Guernsey  and  Jersey,  or  Town  of  Berwick 
upon  Tweed,  in  oth"r  Ship  or  Ships,  Vessel  or  Vessels  whatsoever, 
but  in  such  as  do  truly  and  without  Fraud  belong  only  to  tlie 
People  of  England  or  Ireland,  Dominion  of  Wales,  or  Town  of 
Berwick  u}»on  Tweed,  or  of  the  Lauds,  Islands,  Plantations,  or 
Territories  in  Asia,  Africa,  or  America,  to  his  Majesty  belonging, 
as  the  I'roprietors  and  right  Owners  thereof,  and  whereof  tlie  ^\a.»- 
ter,  and  three-fourths  at  least  of  the  Mariners  are  English  ;  .  .  . 

IV.  And  it  is  further  enacted  by  the  Authority  aforesaid.  That 
no  Goods  or  Commo«lities  that  are  of  Foreign  Growth,  Production, 
or  Manufacture,  and  which  are  to  be  brought  into  England,  Ireland, 
Wales,  the  L-<lauds  of  Guernsey  and  Jersey,  or  Town  of  J>erwick 
upon  Tweed,  in  English-huiU  Shipping,  or  other  Shipping  belong- 
ing to  some  of  the  aforesaid  Places,  and  navigated  by  English  Mari- 
ners, as  aforesaid,  shall  be  shipped  or  brought  from  any  otlicr  Place 
or  Places,  Country  or  Countries,  but  only  from  those  of  the  said 
Growth,  Production,  or  Manufacture,  or  from  those  Ports  where 
the  said  Goods  and  Commodities  can  only,  or  are,  or  usually  have 
been,  first  ship])ed  for  Transportation,  and  from  none  other  Place 
or  Countries;  .  .  . 

VIII.  And  it  is  further  enacted  by  the  Authority  aforesaid, 
That  no  Go<h1s  or  Commodities  of  the  Growth,  Production,  or 
Manufacture  of  Miutcovy,  or  of  any  the  Countries,  Dominions,  or 
Territories  to  the  Great  Duke  or  Emperor  of  Muscovy  or  Biissia 
belonging;  as  also  that  no  Sort  of  Masts,  Timber,  or  Boards,  no 
foreign  Salt,  Pitch,  Tar,  Rosin,  Hemp  or  Flax,  Raisins,  Figs, 
Prunes,  Olive-Oils,  no  Sorts  of  Corn  or  Grain,  Pot-Ashes,  Wines, 
Vinegar,  or  Spirits  called  Atjua-Vitae,  or  Brandy-Winr,  shall 
from  and  after  the  first  day  of  April,  which  shall  be  in  the  Year  of 
our  Lord  one  thousand  six  hundred  sixty-one,  be  imported  into 
England,  Ireland,  fVales,  or  Town  of  Berwick  upon  Ticeed,  in  any 
Ship  or  Ships,  Vessel  or  Vessels  whatsoever,  but  in  such  as  do 
truly  and  without  fraud  belong  to  the  People  thereof,  or  some  of 
them,  as  the  true  Owners  and  Proprietors  thereof,  and  whereitf  the 
Master  and  three-fourths  of  the  Mariners  at  least  are  English: 
And  that  no  Currans  nor  Commodities  of  the  Growth,  Production, 
or  Manufacture  of  any  the  Countries,  Islands,  Dominions,  or  Ter- 
ritories to  the  Ottoman  or  Turkish  Empire  belonging,  shall  from 


It  t 


APPENDIX  I. 


613 


rica,  or  of  any 
n  in  tlu'  usual 
igland,  Ireland, 
)wn  of  Berwick 
isols  whatsoever, 
>ng  only  to  till' 
lies,  or  Town  o{ 

Plantations,  or 
ijjesty  belonging, 
rtliercof  the  Mas- 

English;  .  •  • 
by  afi>resaitl,  Tliat 
jwth,  rro*hu'ti*'". 
England,  Ireland, 
Town  of  Ikrwkk 
■  Shivpins  hi'long- 
I  by  English  Mari- 
>m  any  other  IMacc 
.1  those  of  the  said 
those   Vorts  where 
ire,  or  usually  have 
m  none  other  I'lace 

uthovity  aforesaid, 
[th,    rroiluction,  or 
•io8.  Dominion!',  or 
\muscovij  or  linssia 
[rbor,  or  Boards,  no 
[ax.  Raisins,  Vigs. 
l»ot-Ashes,  Wines, 
irandy-Wine.   shall 
hi  be  in  the  Year  of 
1,  be  iinported  into 
hpon  Tweed,  in  any 
but  in  such  as  do 
I  thereof,  or  some  of 
,,f,  and  whereof  the 
[least  are  En<l^i»h- 
growth,  Production. 
Jominions,  or  Ter 
longing,  shall  from 


and  after  the  first  day  of  September,  which  shall  be  in  the  year  of 
our  Lord  one  thousand  six  hundred  sixty-one,  be  imported  into  any 
the  afore-mentioned  places  in  any  Ship  or  Vessel,  but  which  is  of 
English  built,  and  navigated,  as  aforesaid,  and  in  no  other,  except 
only  such  foreign  Ships  and  Vessels  as  are  of  the  Built  of  that 
Country  or  Place  of  which  the  said  Goods  are  the  Growth,  Produc- 
tion, or  Maiuifacture  respectively,  or  of  such  Port  where  the  said 
Goods  can  only  be,  or  most  usually  are,  first  shipped  for  Transpor- 
tation, and  whereof  the  Master  and  three-fourths  of  the  Mariners 
at  least  are  of  the  said  Country  or  Place;  .   .  . 

XVI II.  And  it  is  further  enacted  by  the  Authority  afore- 
said, That  from  and  after  the  first  Day  of  April,  whicli  shall  be 
in  the  Year  of  our  Lord  one  thousand  six  hundred  sixty-one,  no 
Sugars,  Tobacco,  Cotton-Wool,  Indigoes,  Ginger,  Fustick,  or 
other  dying  Wood,  of  the  Growth,  Production,  or  Manufacture 
of  any  English  Plantations  in  America,  Asia,  or  Africa,  shall  be 
shipped,  carried,  conveyed,  or  transported  from  any  of  the  said 
English  Plantations  to  any  Land,  Island,  Territory,  Dominion, 
Port  or  Place  whatsoever,  other  than  to  such  other  English  Planta- 
tions as  do  belong  to  his  Majesty,  his  Heirs  and  Successors,  or 
to  the  kingdom  of  England  or  Ireland,  or  Principality  of 
Wales,  or  Town  of  Berwick  upon  Tweed,  there  to  be  laid  on 
shore;  .  .  . 

Act  of  1662, 14  Car.  IL,  c.  11. 

XXIII.  And  whereas  some  Doubts  and  Disputes  have  arisen 
cnnoernii\g  the  said  late  Act,  For  increasing  and  encouraging  of 
Shipping  and  Navigation,  about  some  of  the  Goods  therein  pro- 
liilnted  to  be  brought  from  Holland  and  the  Parts  and  Ports  there- 
abnits;  (2)  Be  it  enacted  and  declared,  that  no  Sort  of  Wines, 
(other  than  Mhenish)  no  Sort  of  Spicery,  Grocery,  Tobacco,  Pot- 
Ashes,  Pitch,  Tar,  Salt,  Rozin,  Deal-Boards,  Fir,  Timber,  or 
Olive-Oil,  shall  be  imported  into  England,  Wales,  or  Berwick, 
trim  the  Netherlands  or  Germany,  upon  any  Pretence  whatsoever, 
many  Sort  of  Ships  cr  Vessels  whatsoever;  .  .   . 

Act  of  1663,  15  Car.  1L,  c.  7. 

V.  And  in  regard  his  Majesty's  Plantations  beyond  the  Seas 
are  inhabited  and  peopled  by  his  subjects  of  this  his  Kingdom  of 
England,  for  the  maintaining  a  greater  Correspondence  and  Kind- 
ness between  them,  and  keeping  them  in  a  further  Dependance 

33 


n 


514 


ECONOMIC  HISTORY. 


:;i 


?■■''■ 

i:.' 

k  .:< 

r    :-i 

'. 

i' 

r--q 

fcb^^jjM^ 

N''>      !• 

^W^5?!By^ 

'ygljj^jjyk 

I  Mi 


in 


,1/ 


upon  it,  and  rendring  them  yet  more  beneficial  and  advantageous 
unto  it  in  the  further  Imployment  and  Increase  of  English  Ship- 
ping and  Seamen,  Vent  of  English  Woollen  and  other  Manufac- 
tures and  Commodities,  rendring  the  Navigation  to  and  from  tlie 
same  more  safe  and  cheap,  and  making  this  Kingdom  a  Staple,  not 
only  of  the  Commodities  of  those  plantations,  but  also  of  the 
Commodities  of  other  Countries  and  Places  for  the  Supplying  of 
them;  and  it  being  the  Usage  of  other  Nations  to  keep  their  Plan- 
tations Trade  to  themselves : 

VI.  Be  it  enacted,  and  it  is  hereby  enacted.  That  from  and 
after  the  five  and  twentieth  day  of  March,  one  thousand  six  hun- 
dred sixty-four,  no  Commodity  of  the  Growth,  Production,  or  Man- 
ufacture of  Europe,  shall  be  imported  into  any  Land,  Island, 
Plantation,  Colony,  Territory,  or  Place  to  his  Majesty  bc-^nging, 
or  which  shall  hereafter  belong  unto  or  be  in  the  Possession  of  his 
Majesty,  his  Heirs  and  Successors,  in  Asia,  Africa,  or  America, 
{Tangier  only  excepted)  but  what  shall  be  bona-fide,  and  without 
Praud,  laden  and  shipped  in  England,  Wales,  or  the  Town  of  Ber- 
wick upon  Tweed,  and  in  English  built  Shipping,  or  which  were 
bona-fide  bought  before  the  first  day  of  October  one  thousand  six 
hundred  sixty  and  two,  and  had  such  Certificate  thereof  as  is  di- 
rected in  one  Act  passed  the  last  Sessions  of  this  Present  Parlia- 
ment, intituled,  An  Act  for  preventing  Frauds,  and  Rcgulat'm(j 
Abuses  in  his  Majesty's  Customs;  and  whereof  the  Master  and 
three  Fourths  of  the  Mariners  at  least  are  English,  and  which  shall 
be  carried  directly  thence  to  the  said  Lands,  Islands,  Plantations, 
Colonies,  Territories,  or  Places,  and  from  no  other  Place  or 
Places  whatsoever;  any  Law,  Statute,  or  Usage  to  the  contrary 
notwithstanding;  .  .   . 

See  English  Statutes  at  Large. 


APPENDIX  II. 


515 


II. 


IMPORTANT  SECTIONS  OF  AMERICAN  NAVIGATION 

ACTS. 


Act  op  July  20,  1789. 

Chap.  III. —  An  Act  imposing  Duties  on  Tonnage. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  the  fol- 
lowing duties  shall  be,  and  are  imposed  on  all  ships  or  vessels  en- 
tered in  the  United  States,  that  is  to  say : 

On  all  ships  or  vessels  built  within  the  said  States,  and  belong- 
ing wholly  to  a  citizen  or  citizens  thereof,  or  not  built  within  the 
said  States,  but  on  the  twenty-ninth  day  of  May,  one  thousand 
seven  hundred  and  eighty-nine,  belonging,  and  during  the  time 
such  vessel  or  vessels  shall  continue  to  belong  wholly  to  a  citizen 
or  citizens  thereof,  at  the  rate  of  six  cents  per  ton.  On  all  ships  or 
vessels  hereafter  built  in  the  United  States,  belonging  wholly, 
or  in  part,  to  subjects  of  foreign  powers,  at  the  rate  of  thirty  cents 
per  ton.  On  all  other  ships  or  vessels,  at  the  rate  of  fifty  cents 
per  ton. 

Sec.  3.  And  be  it  further  enacted,  That  every  ship  or  vessel  em- 
ployed in  the  transportation  of  any  of  the  produce  or  manufactures 
"f  the  United  States,  coastwise  wi*^hin  the  said  States,  except  such 
sliip  or  vessel  be  built  within  the  said  States,  and  belong  to  a  citizen 
or  citizens  thereof,  shall,  on  each  entry,  pay  fifty  cents  per  ton. 

1  U.  S.  Statutes  at  Large,  27. 

Act  op  Dec.  31, 1792. 

Chap.  I.   An  Act  concerning  the  Registering  and  Recording  of 

Ships  or  Vessels. 

Sectiox  1.  Be  it  enacted,  .  .  .  That  ships  or  vessels  which  shall 
liave  been  registered  by  virtue  of  the  act,  intituled  "  An  act  for  regis- 
tering and  clearing  vessels,  regulating  the  coasting  trade  and  for 
"tlipr  purposes, "  and  those  which  after  the  last  day  of  March  next, 
i^.iall  be  registered,  pursuant  to  this  act,  and  no  other  (except  such 


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616 


ECONOMIC  HISTORY. 


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as  shall  be  duly  qualified,  according  to  law,  for  carrying  on  the 
coasting  trade  and  fisheries,  or  one  of  them)  shall  be  denominated 
and  deemed  ships  or  vessels  of  the  United  States,  entitled  to  the 
benefits  and  privileges  appertaining  to  such  ships  or  vessels :  Pro- 
vided, That  they  shall  not  continue  to  enjoy  the  same,  longer  tliaii 
they  shall  continue  to  be  wholly  owned,  and  to  be  commanded  by  a 
citizen  or  citizens  of  said  states. 

Sec.  2.  And  be  it  further  enacted,  That  ships  or  vessels  built 
within  the  United  States,  whether  before  or  after,  the  fourth  of 
July,  one  thousand  seven  hundred  and  seventy  six,  and  belonging 
wholly  to  a  citizen  or  citizens  thereof,  or  not  built  within  the  said 
states,  but  on  the  sixteenth  day  of  May,  in  the  year  one  thousand 
seven  hundred  and  eighty  nine,  belonging  and  thenceforth  continu- 
ing to  belong  to  a  citizen  or  citizens  thereof,  and  ships  or  vessels 
which  may  hereafter  be  captured  in  war,  by  such  citizen  or  citizens, 
and  lawfully  condemned  as  prize,  or  which  have  been  or  may  lie 
adjudged  to  be  forfeited  for  a  breach  of  the  laws  of  the  United 
States,  being  wholly  owned  by  a  citizen  or  citizens  thereof,  and  no 
other,  may  be  registered  as  hereinafter  directed:  Provided,  Tliat 
no  such  ship  or  vessel  shall  be  entitled  to  be  so  registered,  or  if 
registered,  to  the  benefits  thereof,  if  owned  in  whole,  or  in  part, 
by  any  citizen  of  the  United  States,  who  usually  resides  in  a  fnr- 
eign  country,  during  the  continuance  of  such  residence,  unless 
such  citizen  be  in  the  capacity  of  a  consul  of  the  United  States,  or 
an  agent  for,  and  a  partner  in,  some  house  or  trade  or  co-partner- 
ship, consisting  of  citizens  of  the  said  states  actually  carrying  on 
trade  within  the  said  states. 

1  Statutes  at  Large,  287. 

Act  of  March  1,  1817. 

Chap.  XXXI.  — An  Act  concerning  the  navigation  of  the  UnM 

States. 

Be  it  enacted,  .  .  .  That  after  the  thirtieth  day  of  September  next 
no  goods,  wares,  or  merchandise,  shall  be  imported  into  the  UnitiJ 
States  from  any  foreign  port  or  place,  except  in  vessels  of  the 
United  States,  or  in  such  foreign  vessels  as  truly  and  wholly  in- 
long  to  the  citizens  or  subjects  of  that  country  of  which  the  gi">ils 
are  the  growth,  production,  or  manufacture;  or  from  which  stuli 
goods,  wares,  or  merchandise,  can  only  be,  or  most  us'ially  .if- 
first  shipped  for  transportation :  Provided,  nevertheless,  That  this 
regulation  shall  not  extend  to  the  vessels  of  any  foreign  nati'in 


APPENDIX  II. 


617 


Igation  of  the  Unltd 


[evertheless,  That  tin. 


which  has  not  adopted,  and  which  shall  not  adopt,    a  similar 
regulation. 

Sec.  4.  And  be  it  further  enacted,  That  no  goods,  wares, 
or  merchandise,  shall  be  imported,  under  penalty  of  forfeiture 
thereof,  from  one  port  of  the  United  States  to  another  port  of  the 
United  States,  in  a  vessel  belonging  wholly  or  in  part  to  a  subject 
of  any  foreign  power;  but  this  clause  shall  not  be  construed  to 
prohibit  the  sailing  of  any  foreign  vessel  from  one  to  another  port 
of  the  United  States,  provided  no  goods,  wares,  or  merchandise, 
other  than  those  imported  in  such  vessel  from  some  foreign  port, 
and  which  shall  not  have  been  unladen,  shall  be  carried  from  one 
port  or  place  to  another  in  the  United  States. 

3  Statutes  at  Large,  351. 

Act  of  May  24,  1828. 
Chap.  CXI.  — An  Act  in  addition  to  an  act,  entitled,  "An  act  con- 
cerning discriminating  duties  of  tonnage  and  impost." 

Be  it  enacted,  .  .  .  That,  upon  satisfactory  evidence  being  given 
to  the  President  of  the  United  States  by  the  government  of  any  for- 
eign nation  that  no  discriminating  duties  of  tonnage  or  impost  are 
imposed  or  levied  in  the  ports  of  the  said  nation  upon  vessels  wholly 
belonging  to  citizens  of  the  United  States,  or  upon  the  produce, 
manufactures,  or  merchandise  imported  in  the  same  from  the  United 
States,  or  from  any  foreign  country,  the  President  is  hereby  author- 
ized to  issue  his  proclamation,  declaring  that  the  foreign  discrim- 
inating duties  of  tonnage  and  impost  within  the  United  States  are 
and  shall  be  suspended  and  discontinued,  so  far  as  respects  the  ves- 
sels of  the  said  foreign  nation,  and  the  produce,  manufactures,  or 
merchandise  imported  into  the  United  States  in  the  same  from  the 
said  foreign  nation,  or  from  any  other  foreign  country:  the  said 
suspension  to  take  effect  from  the  time  of  such  notification  being 
given  to  the  President  of  the  United  States,  and  to  continue  so 
Img  as  the  reciprocal  exemption  of  vessels  belonging  to  citizens  of 
the  United  States,  and  their  cargoes,  as  aforesaid,  shall  be  contin- 
ued and  no  longer. 

4  Statutes  at  Large,  308. 

Act  of  Feb.  10,  1866. 
Chap.  VIII.  —  An  Act  to  regulate  the  Registering  of  Vessels. 

Be  it  enacted,  .  .  .  That  no  ship  or  vessel,  which  has  been  re- 
corded or  registered  as  an  American  vessel,  pursuant  to  law,  and 


518 


ECONOMIC  HISTORY. 


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which  shall  have  been  licensed  or  otherwise  authorized  to  sail  under 
a  foreign  flag,  and  to  have  the  protection  of  any  foreign  govern- 
ment during  the  existence  of  the  rebellion,  shall  be  deemed  or 
registered  as  an  American  vessel,  or  shall  have  the  rights  and  priv- 
ileges of  American  vessels,  except  under  the  provisions  of  an  act 
of  Congress  authorizing  such  registry. 
14  Statutes  at  Large,  3. 

Act  of  Junk  26,  1884. 

CuAP.  CXXI.  — An  Act  to  remove  certain  burdens  on  the  American 
merchant  marine  and  encourage  the  American  foreign  carry- 
ing  trade. 

Sec.  14.  [Be  it  further  enacted,']  That  in  lieu  of  the  tax  on  ton- 
nage of  thirty  cents  per  ton  per  annum  heretofore  imposed  by  law,  a 
duty  of  three  cents  per  ton,  not  to  exceed  in  the  aggregate  fifteen 
cents  per  ton  in  any  one  year,  is  hereby  imposed  at  each  entry  on 
all  vessels  which  shall  be  entered  in  any  port  of  the  United  States 
from  any  foreign  port  or  place  in  North  America,  Central  America, 
the  West  India  Islands,  the  Bahama  Islands,  the  Bermuda  Island;!, 
or  the  Sandwich  Islands  or  Newfoundland;  and  a  duty  of  six  cents 
per  ton,  not  to  exceed  thirty  cents  per  ton  per  annum,  is  hereby 
imposed  at  each  entry  upon  all  vessels  which  shall  be  entered  in 
the  United  States  from  any  other  foreign  ports : 

Sec.  17.  When  a  vessel  is  built  in  the  United  States  for  foreign 
account,  wholly  or  partly  of  foreign  materials  on  which  import 
duties  have  been  paid,  there  shall  be  allowed  on  such  vessel,  when 
exported,  a  drawback  equal  in  amount  to  the  duty  paid  on  sucii 
materials,  to  be  ascertained  under  such  regulations  as  may  be  pre- 
scribed by  the  Secretary  of  the  Treasury.  Ten  i>er  centum  of  tlie 
amount  of  such  drawback  shall,  however,  be  retained  for  the  use  vi 
the  United  States  by  the  collector  paying  the  same. 

23  Statutes  at  Large,  67. 


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i 


Act  of  March  3,  1891. 
Chap.  DXIX.  —  An  Act  to  provide  for  ocean  mail  service  between 
the  United  States  and  foreign  ports,  and  to  promote  commerce. 

Be  it  enacted,  .  .  .  That  the  Postmaster-General  is  hereby  autii'^r- 
ized  and  empowered  to  enter  into  contracts  for  a  term  not  less  tliau  j 
five  nor  more  than  ten  years  in  duration,  with  American  citizen?. 
for  carrying  of  mails  on  American  steamships,  between  ports  of  w 


APPENDIX  11. 


519 


ized  to  sail  under 
J  foreign  govern- 
ill  be  deemed  or 
e  rights  and  priv- 
jvisions  of  an  act 


IS  on  the  American 
lean  foreign  carry 

I  of  the  tax  on  ton- 
B  imposed  by  law,  a 
le  aggregate  fifteen 
3d  at  each  entry  on 
E  the  United  States 
a,  Central  America, 
le  Bermuda  Islands, 
I  a  duty  of  six  cents 
pr  annum,  is  l>ert^^Kv 
shall  be  entered  in 

ed  States  for  foreign 
L  on  which  import 
,n  such  vessel,  when 
,  duty  paid  on  such 
aons  as  may  be  pre- 
|n  per  centum  oi  the 
■tainedfortheuseof 

tame. 


\mail  service  ief«'ee« 

leral  is  hereby  author- 
■a  term  not  less  than 
\  American  citizenM 
I,  between  potts  o{  the 


United  States  and  such  ports  in  foreign  countries,  the  Dominion  of 
Canada  excepted,  as  in  his  judgment  will  best  subserve  and  pro- 
mote the  postal  and  commercial  interests  of  the  United  States,  the 
mail  service  on  such  lines  to  be  equitably  distributed  among  the 
Atlantic,  Mexican,  Gulf,  and  Pacific  ports.  .  .  . 

Sec.  3.  That  the  vessels  employed  in  the  mail  service  under  the 
provisions  of  this  act  shall  be  American  built  steamships,  owned 
and  officered  by  American  citizens,  in  conformity  with  the  existing 
laws.  .  .  .  They  shall  be  divided  into  four  classes.  The  first  class 
shall  be  iron  or  steel  screw  steamships,  capable  of  maintaining  a 
speed  of  twenty  knots  an  hour  at  sea  in  ordinary  weather,  and  of  a 
gross  registered  tonnage  of  not  less  than  eight  t..jusand  tons.  No 
vessel  except  of  said  first  class  shall  be  accepted  for  said  mail  ser- 
vice under  the  provisions  of  this  act  between  the  United  States 
and  Great  Britain.  The  second  class  shall  be  iron  or  steel  steam- 
ships, capable  of  maintaining  a  speed  of  sixteen  knots  an  hour  at 
sea  in  ordinary  weather,  and  of  a  gross  registered  tonnage  of  not 
less  than  five  thousand  tons.  The  third  class  shall  be  iron  or  steel 
steamships,  capable  of  maintaining  a  speed  of  fourteen  knots  an 
hour  at  sea  in  ordinary  weather,  and  of  a  gross  registered  tonnage 
of  not  less  than  two  thousand  five  hundred  tons.  The  fourth  class 
shall  be  iron  or  steel  or  wooden  steamships,  capable  of  maintaining 
a  speed  of  twelve  knots  an  hour  at  sea  in  ordinary  weather,  and  of 
a  gross  registered  tonnage  of  not  less  than  fifteen  hundred  tons. 

Sec.  4.  That  all  steamships  of  the  first,  second,  and  third 
classes  employed  as  above  and  hereafter  built  shall  be  constructed 
with  particular  reference  to  prompt  and  economical  conversion  into 
auxiliary  naval  cruisers,  and  according  to  plans  and  specifications 
to  be  agreed  upon  by  and  between  the  owners  and  the  Secretary  of 
the  Navy,  and  they  shall  be  of  sufficient  strength  and  stability  to 
carry  and  sustain  the  working  and  operation  of  at  least  four  effect- 
ive rifled  cannon  of  a  caliber  of  not  less  than  six  inches,  and  shall 
be  of  the  highest  rating  known  to  maritime  commerce.   .   .  . 

Sec.  5.  That  the  rate  of  compensation  to  be  paid  for  such  ocean 
mail  service  of  the  said  first-class  ships  shall  not  exceed  the  sum  of 
four  dollars  a  mile,  and  for  the  second-class  ships  two  dollars  a 
mile,  by  the  shortest  practicable  route,  for  each  outward  voyage ; 
for  the  third-class  ships  shall  not  exceed  one  dollar  a  mile,  and  for 
the  fourth-class  ships  two-thirds  of  one  dollar  a  mile  for  the  actual 
number  of  miles  required  by  the  Post  Office  Department  to  be 
travelled  on  each  outward  bound  voyage :  .  .  . 

26  Statutes  at  Large,  830. 


620 


ECONOMIC  HISTORY, 


u 


m. 

THE  AMEEICAN  CIVIL  WAR. 
COST  OP  THE  WAR. 

From  Report  of  Special  Commissioner  of  the  Revenue  (David 
A.  Wells)  1869,  pp.  iv-vii. 

It  would  seem  desirable  at  this  point,  now  that  all  feeling  in  re- 
gard to  the  subject  from  its  bearing  on  political  questions  has 
apparently  passed  away,  to  place  upon  record  the  exact  cost  of  the 
war,  as  nearly  as  the  same  can  be  determined.  With  this  object 
attention  is  asked  to  the  following  exhibit :  — 

The  amount  of  outstanding  national  indebted- 
ness March  7,  18G1,  was  $76,455,299.28. 

During  the  four  years  of  war  which  terminated 
in  April,  1865  (April  1,  1801,  to  April  1, 
1865),  the  actual  receipts  of  the  treasury, 
were  as  follows :  — 

From  internal  revenue    .     .  $314,337,317  01 

From  customs 280,861,618  45 

From  lands 1,812,083  80 

From  direct  tax     ...     .  4,668,259  31 

From  miscellaneous  sources  74,120,413  37 

Total  receipts     .     . $675,799,69194 

The  receipts  of  revenue  from  April  1,  1865, 
to  June  30,  1869,  inclusive,  during  which 
period  the  larger  portion  of  the  expenditures 
has  been  directly  in  consequence  of  the  war, 
were  as  follows:  — 
From  internal  revenue    .    .    $967,207,221  41 

From  customs 729,991,875  97 

From  lands 7,402,188  28 

From  direct  tax     ...     .  9,017,217  30 

From  miscellaneous  sources        194,949,122  13 

Total  receipts  .     . «1,908,567,625  09 


APPENDIX  III, 


521 


Revenue  (David 


The  amount  of  outstanding  indebtedness, 
less  cosh  and  sinking  fund  in  treasury, 
June  30,  1869,  was  $2,489,002,480.58. 

Deducting  from  this  the  amount  of  outstand- 
ing indebtedness  at  the  outbreak  of  the 
war  (870,455,299.28),  we  have,  as  the 
sum  borrowed  for  war  purposes  and  not 
repaid  out  of  the  receipts  above  indicated    92,412,547,181  30 


Making  the  total  expenditure  (loans 
and  receipts)  in  eight  and  a  quarter 
years  of  war  and  its  effects      .     .     . 
Deducting  the  amount  which,  but  for  the 
war,  might  be  taken  as  the  average  ex- 
penditure of  the  government  during  this 
period,  say  $100,000,000  per  annum    .    . 


94,996,914,498  33 


825,000,000  00 


We  shall  have $4,171,914,498  33 

ffliicli  sum  represents  the  cost  of  the  war  to  the  United  States 
government  down  to  June  30,  1869. 

To  this  sum  should  be  added  the  value  of  the  pensions  now  paid 
by  the  government  on  account  of  the  war,  if  the  same  were  capi- 
talized. This  at  eight  years'  purchase  of  the  present  annual  pay- 
ment, would  amount  to  about  two  hundred  millions. 

But  this  aggregate,  however  large,  must  still  further  be  increased 
by  other  items  if  we  would  reach  the  true  cost  of  the  war  to  us  as 
a  people,  the  above  representing  only  the  expenditures  of  the  na- 
tional government. 

These  additional  charges  are  substantially  as  follows :  — 

Increase  of  State  debts,  mainly  on  war 
account $123,000,000  00 

County,  city,  and  town  indebtedness  in- 
creased on  account  of  the  war  (estimated)         200,000,000  00 

Expenditures  of  States,  counties,  cities,  and 
towns,  on  account  of  the  war,  not  rep- 
resented by  funded  debt  (estimated)  .     . 

Estimated  loss  to  the  loyal  States  from  the 
diversion  and  suspension  of  industry,  and 
the  reduction  of  the  American  marine 
and  carrying  trade 1,200,000,000  00 

Estimated  direct  expenditures  and  loss  of 
property  by  the  Confederate  States  by 
reason  of  the  war 2,700,000,000  00 


600,000,000  00 


m 


622 


ECONOMIC  HISTORY. 


n 


K  I 


Tliese  estimates,  which  are  believed  to  be  moderate  and  reason- 
able, show  an  aggregate  destruction  of  wealth,  or  diversion  of  in- 
dustry, which  would  have  produced  wealth  in  the  United  States 
since  18G1  approximating  nine  thousand  millions  of  dollars  — a 
sum  nominally  in  excess  of  the  entire  increase  of  wealth,  as  re- 
turned by  the  census  for  the  whole  country  from  1850  to  18C0. 

This,  then,  was  the  cost  of  the  destruction  of  slavery ;  the  cost 
of  compromise  ;  the  cost  of  the  unfaithfulness  of  those  who 
founded  this  nation  to  the  idea  by  which  the  nation  lives.  ^Vllat 
does  it  measure?  It  is  substantially  a  thousand  millions  a  year 
for  nine  years;  or  at  the  wages  of  five  hundred  dollars  a  year,  the 
labor  of  two  millions  of  men  exerted  continuously  during  the 
whole  of  that  period.  It  is  three  times  as  much  as  the  slave  pru])- 
erty  of  the  country  was  ever  worth.  It  is  a  sum  which  at  interest 
would  yield  to  the  end  of  time  twice  as  much  as  the  annual  shivc 
product  of  the  South  in  its  best  estate. 

*'  The  places  of  those  who  sleep  in  their  graves  have  been  filled 
by  new  laborers;  the  incubus  of  slavery,  which  was  slowly  but 
surely  making  the  fertile  South  a  desert  scorched  as  by  a  fonsiim- 
ing  lire,  has  been  removed;  thousands  of  miles  of  new  railroads; 
inventions  never  before  excelled  in  their  labor-saving  character; 
millions  of  acres  of  the  richest  lands  opened  to  settlement,  now 
render  labor  easy  and  product  large."  Without  faltering  and  with- 
out tampering  with  the  public  faith,  it  is  now  the  duty  of  this 
people  to  undertake  the  far  easier  task  of  payment  for  the  service 
already  rendered.  If  we  hesitate  or  falter,  dishonor,  second  only 
to  that  which  tolerated  slavery,  will  overwhelm  the  land,  and  the 
idea  of  a  free  people  governing  themselves  will  become  a  scorn  and 
a  by-word  among  nations. 


PAYMENT  OF  THE  WAR  DEBT. 


From  Report  of  the  Secretary  op  the  Treasury  (Hugh  Mo- 
Culloch)  1881,  pp.  xxvii-xxix. 


HI: 


It  is  in  the  highest  degree  gratifying  to  the  Secretary  to  notice 
the  great  reduction  of  the  public  debt  since  it  reached  its  highest 
point  in  August,  1865,  and  its  continued  reduction  since  his  last 
report,  in  1868.  The  following  table  exhibits  the  reduction  both 
of  principal  and  interest:  — 


APPENDIX  in.  628 

On  August  31,  1865,  the  indebtedness  of  the  United  States,  not 
including  bonds  issued  to  the  Pacific  Bailroad  Companies,  was  as 
follows :  — 

Debt  bearing  coin  interest 91,108,310,101  80 

Debt  bearing  currency  interest      ....  1,273,220,10316 

Matured  debt  not  presented  for  payment    .  1,503,020  09 

Debt  bearing  no  interest 461,616,311  51 

Total  debt 92,844,649,626  56 

Cash  in  the  treasury 88,218,055  13 


Amount  of  debt  less  cash  in  the  treasury    $2,756,431,571  43 

The  annual  interest  charge  was  $160,977,697.87,  and  the  average 
rate  paid  was  6  -^^  per  cent. 

On  Nov.  1,  1868,  the  indebtedness  of  the  United  States,  not 
including  bonds  issued  to  the  Pacific  Bailroad  companies  was  as 
follows :  — 

Debt  bearing  coin  interest $2,107,577,950  00 

Debt  bearing  currency  interest     ....  72,325,000  00 

Matured  debt  not  presented  for  payment    .  9,753,723  64 

Debt  bearing  no  interest 409,151,898  42 

Total  debt $2,598,808,572  06 

Cash  in  the  treasury 113,873,019  24 

Amount  of  debt  less  cash  in  the  treasury    $2,484,935,552  82 


The  annual  charge  was  $126,408,343,  and  the  average  rate  paid 
was  5  ^  per  cent. 
On  Nov.  1,  1884,  the  public  debt  was  as  follows :  — 

Debt  bearing  interest $1,206,475,600  00 

Debt  on  which  interest  has  ceased  since 

maturity 12,547,485  26 

Debt  bearing  no  interest 623,468,436  36 

Total  debt $1,842,491,52162 

Cash  in  the  treasury 434,008,572  93 


Amount  of  debt  less  cash  in  the  treasury    $1,408,482,948  69 


524 


ECONOMIC  HISTORY. 


The  annual  interest  charge  is  now  (1884)  $47,323,831.60,  and 
the  average  rate  paid  3  -f^fj  per  cent. 


Reduction  of  debt  in  sixteen  years    . 
Reduction  of  annual  interest  charge 
Reduction  of  debt  in  nineteen  years  . 
Reduction  of  annual  interest  cliarge 


•1,076,452,604  13 

79,084,611  SO 

1,847,048,622  74 

103,653,860  37 


In  the  management  of  its  debt  the  United  States  has  been  an 
example  to  the  world.  Nothing  has  so  much  surprised  European 
statesmen  as  the  fact  that  immediately  after  the  termination  of  out* 
of  the  most  expensive  and,  in  some  respects,  exhaustive  wars  tliat 
have  ever  been  carried  on,  the  United  States  should  have  cuni- 
menced  the  payment  of  its  debt  and  continued  its  reduction  through 
all  reverses  until  nearly  one  half  of  it  has  been  paid ;  that  reduc- 
tion in  the  rate  of  interest  has  kept  pace  with  the  reduction  of  the 
principal;  that  within  a  period  of  nineteen  years  the  debt,  wV.lth 
it  was  feared  would  be  a  heavy  and  never  ending  burden  upon  the 
people,  has  been  so  managed  as  to  be  no  longer  burdensome.  It  is 
true  that  all  this  has  been  effected  by  heavy  taxes,  but  it  is  also 
true  that  these  taxes  have  neither  checked  enterprise  nor  retarded 
growth. 


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APPENDIX  IV. 


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526 


ECONOMIC  HISTORY. 


f  iii 


V. 


THE  UNITED  STATES  IN  1890. 


THE  POPULATION  OF  THE  UNITED  STATES,  1890. 

Robert  P.  Porter. 

[Eleventh  Census  Bulletin,  No.  16.] 

The  population  of  the  United  States  on  June  1,  1890,  as  shown 
by  the  final  count  of  persons  and  families,  exclusive  of  white  per- 
sons  in  Indian  Territory,  Indiaiis  on  reservations,  and  Alaska,  was 
62,622,250;  including  these  persons  the  population  will  probably 
reach  in  round  numbers  G'3,000,000.  In  1880  the  populatii)n  was 
50,155,783.  The  absolute  increase  of  the  population  in  the  ten 
years  intervening  was  12,466,467,  and  the  percentage  of  increase 
was  24.86.  In  1870  the  population  was  stated  as  38,558,.'?71. 
According  to  these  figures  the  absolute  increase  in  the  decade  be- 
■  tveen  1870  and  1880  was  11,51)7,412,  and  the  percentage  of  in- 
crease was  30.08. 

Upon  their  face  these  figures  show  that  the  population  has  in- 
creased between  1880  and  1890,  869,055  more  than  between  1870 
and  1880,  while  the  rate  of  increase  has  apparently  diminished 
from  30.08  to  24.86  per  cent.  If  these  figures  were  derived  from 
correct  data,  they  would  be  disappointing.  Such  a  reduction  in  the 
rate  of  increase  in  the  face  of  the  heavy  immigration  during  the 
past  ten  years  would  argue  a  diminution  in  the  fecundity  of  the 
population  or  a  corresponding  increase  in  its  death  rate.  These 
figures  are,  however,  easily  explained  when  the  character  of  the 
data  used  is  understood.  It  is  well  known,  the  fact  having  been 
demonstrated  by  extensive  and  thorough  investigation,  that  the 
census  of  1870  was  grossly  deficient  in  the  Southern  States,  so  much 
so  as  not  only  to  give  an  exaggerated  rate  of  increase  of  the  popu- 


890. 


iTATES,  1890. 


1,  1890,  as  shown 

sive  of  white  pcr- 

i,  and  Ahiska,  was 

tion  will  pnihably 

he  population  was 

lation  in  the  ten 

mtage  of  increase 

1(1  as   38,o58,.S71. 

in  the  decade  be- 

percentage  of  in- 

lopulation  has  in- 
fhan  between  1870 
•ently  diminished 
Ivere  derived  from 
la  reduction  in  tlie 
[ration  during  the 
fecundity  of  the 
?ath  rate.     These 
character  of  the 
fact  having  been 
ligation,  that  tlie 
[m  States,  so  niueb 
Irease  of  the  popu- 


APPENDIX  V.  627 

lation  between  1870  and  1880  in  these  States  but  to  affect  very 
materially  the  rate  of  increase  in  the  country  at  large.   .  .  . 

It  is  fair  to  assume  that  the  rates  of  increase  of  population  of 
the  Southern  States  between  1860  and  1870  and  between  1870  and 
1880  were  related  to  one  another  in  a  proportion  similar  to  the  cor- 
responding rates  in  the  Northern  States  during  the  same  periods. 
In  the  term  "Southern  States"  is  here  included  the  two  Virginias, 
the  two  Carolinas,  Georgia,  Florida,  Alabama,  Mississippi,  Louisi- 
ana, Texas,  Arkansas,  Tennessee,  and  Kentucky.  The  census  of 
1870  is  known  or  is  suspected  to  be  deficient  in  all  these  States. 
In  the  other  States  and  Territories  there  is  no  suspicion  of  incom- 
pleteness. The  population  of  the  Southern  States  in  1860,  1870, 
and  1880,  was  as  follows :  — 

1800 10,259,016 

1870 11,250,411 

1880 15,257,393 

The  population  of  the  other  States  and  Territories  in  1860,  1870, 
and  1880,  was  as  follows :  — 

18G0 21,184,305 

1870 27,:507,960 

1880 34,898,390 

The  rate  of  increase  in  these  other  States  and  Territories  was 
28.9  per  cent  between  18(50  and  1870,  and  27.8  jx'r  cent  between 
1870  and  18S0.  Tliese  two  rates  are  so  nearly  equal  that  in  ex- 
tending them  to  the  Southern  States  they  may  be  regarded  as  iden< 
tical;  in  other  words,  it  may  be  assumed  that  the  rate  of  increase 
in  tlie  Southern  States  between  1860  and  1870  mid  between  1870 
and  1880  were  the  same. 

Classified  as  white  and  colored,  the  population  of  the  Southern 
States  was  as  follows :  — 


Year. 

Wlilte. 

Colored. 

1860 

6,300,703 
7,007,213 
9,592,-68 

3,800,037 
4  179  222 

1870 

1880 

5,657,636 

% 


628 


ECONOMIC  HISTORY. 


|.5  . 


1,,  i  1> 


r  v^  - 


The  increase  of  the  Avhite  between  1860  and  1880  was  50.67  per 
cent,  or  at  a  uniform  rate  for  each  ten  years  of  22.75  per  cent. 
The  increase  of  the  coloi-ed  between  1860  and  1880  was  45.43  per 
cent,  or  at  the  rate  of  20.6  per  cent  for  each  ten  years.  Applying 
these  rates  of  increase  respectively  to  the  white  and  colored  popu. 
lation  in  1860  there  results  as  the  approximate  white  population  in 
1870,  7,815,128  and  for  the  colored,  4,691,385.  These  results  are 
in  excess  of  the  figures  as  returned  by  the  census  of  1870,  in  tlie 
case  of  the  white  747,915,  and  in  the  case  of  the  colored  512,163, 
a  total  of  1,200,078,  which  may  be  assumed  as  approximately  the 
extent  of  the  omissions  by  the  faulty  census  of  1870.  The  total 
population  in  1870  was,  therefore,  approximately  39,818,449,  in- 
stead  of  38,558,371. 

Assuming  these  figures  to  represent  approximately  the  true  pop- 
ulation  in  1870,  the  rates  of  increase  would  stand  as  follows :  — 

Per  cent. 

1860.  31,443,321 

1870.  39,818,449 26.6 

1880.  50,155,783 25.9 

1890.  02,622,250 24.8 


iJ-. 


Omitting  from  consideration  those  States  in  which  the  census  of 
1870  is  known  or  is  presumed  to  have  been  faulty,  the  rate  of  in- 
crease  between  1870  and  1880  in  the  remaining  States  has  been 
very  nearly  maintained  in  the  decade  between  1880  and  1890. 

POPULATION   OF   UNITED   STATES    IN    1870,   1880,  AND  1890  BY 
GEOGRAPHICAL  DIVISIONS. 


Oeograpbical  Divisions. 

PopriAiioii. 

Increase 

FROM  1880 

TO  1890. 

Increase 

FROM  1870 

TO  1880. 

INCRKASB 

FHOM  im 

TO  1870. 

1890. 

1880. 

1870. 
38,558,371 

Per  cent. 

Per  cent. 

Per  cent. 

The  Unltea  States  .    . 

02,622,260 

50,155,783 

24.86 

30.08 

22.63 

North  Atlantic  dWston  . 

17,401.545 

14,507,407 

12,298,730 

19.06 

17.96 

16.09 

South  Atlantic  division  . 

8,857,920 

7,697,197 

5,863,610 

1659 

29.79 

9.11 

North  Central  dWIfllon  . 

22,302,279 

17,364,111 

12,981.111 

28.78 

83.76 

42.70 

South  Central  diTlsion   . 

10,972  898 

8919,871 

6,484,410 

28.02 

8'?.62 

ll.M 

Western  dWlsloa  .    .    . 

8,027.613      1,767,687 

990,610 

7127 

78.46 

60,02 

APPENDIX  V. 


529 


10  was  50.G7  per 
22.75  per  cent. 
JO  was  45.43  per 
ears.     Applying 
nd  colored  popu- 
ite  population  in 
These  results  are 
8  of  1870,  in  the 
colored  512,1^^) 
pproximately  the 
1870.     The  total 
y  39,818,449,  in- 

tely  the  true  pop- 
I  as  follows :  — 

Per  cent. 
•      •      •     ^^^ 
.     .     .    26.6 
.     .     .     25.9 
.     .     .     24.8 

^hich  the  census  of 
Ity,  the  rate  of  in- 
ig  States  has  been 
180  and  1890. 

1880,  AND  1890  BY 


ASF. 

880  1 

so. 

INCREASF 
fROM  1870 
TO  1880. 

ISCREA!! 
FRUM  IBtJO 
TO  18T0. 

mt. 

Per  cent. 

Per  cent. 

86 

30.08 

22,63 
16.09 

06 

17.96 

59 

29.79 

911 

78 

83.76 

42,70 

M 

8'(.62 

llM 

W 

78.46 

6002 

IRON    AND    STEEL    INDUSTRIES. 

IRON-ORE  MINING  INDUSTRY. 

John  Birkinbinb. 
[Eleventh  Census  Bulletin,  No.  113.] 

During  the  year  ended  Dec.  31,  1889,  the  production  of  iron 
ore  amounted  to  14,518,041  long  tons,  which  was  contributed  by 
twenty-six  States  and  two  territories,  and  this  output  represented 
avahie  on  cars  or  carts  at  the  mines  '^f  ^33,351,978,  an  average  of 
§2.30  per  ton. 

Tlie  stock  of  ore  on  hand  at  the  commencement  of  the  census 
year  was  1,966,824  long  tons,  while  at  its  close  thij  amount  was 
augmented  to  2,256,973  tons,  an  increase  for  the  entire  country  of 
290,149  tons,  or  nearly  15  per  cent.  The  stock  of  iron  ore  carried 
over  is  equivalent  to  15.55  per  cent  of  the  production  for  the  census 
year,  but  the  increased  stock,  that  is,  the  amount  of  ore  mined 
but  not  consumed,  represents  but  2  per  cent  of  the  total  output 
for  1889.  Owing  to  the  fact  that  the  census  year  for  mining  cor- 
responded  with  the  calendar  year  1889,  the  stocks  of  iron  ore  on 
band  at  the  commencement  and  end  of  the  year  represented  a 
larger  amount  than  would  have  been  the  case  a  few  months  earlier, 
tbe  practice  of  mine  managers  whose  products  must  reach  a  market 
bv  means  of  water  transportation  encouraging  a  depletion  of  stock 
at  the  mines  during  the  shipping  season  and  an  augmentation  dur- 
ing  the  winter  months,  when  navigation  is  suspended.   .  .   . 

Michigan  was  by  far  the  largest  producer  of  iron  ore  in  the 
oensiLs  year  1889,  a  total  of  5,856,169  long  tons  having  been  mined, 
the  value  of  which  was  $15,800,521  at  the  mines,  an  average  of 
&2.70  per  ton.  The  tonnage  from  Michigan  therefore  represents 
4<>.34  per  cent  of  the  total,  while  the  aggregate  value  is  47.38  per 
cent  of  that  of  the  entire  country. 

The  credit  of  holding  second  rank  lies  between  the  States  of  Ala- 
bama and  Pennsylvania,  the  former,  from  the  figures  collected,  hav. 
ing  apparently  a  slightly  greater  output  than  the  latter.  This 
uncertainty  is  owing  to  the  fact  that  the  reports  obtained  from  two  of 

84 


M 


630 


ECONOMIC  HISTORY. 


I'! 


the  larger  Alabama  mines  covered  operations  commencing  May  1, 
1889,  and  ending  May  1,  1890,  and  no  detailed  record  of  the 
amount  of  ore  produced  and  labor  employed  during  the  three 
months  of  1890  was  obtainable.  The  position  of  Pennsylvania  is 
also  affected  by  the  refusal  of  one  large  producer  to  supply  absohite 
figures;  but  it  will  be  noted  that  in  the  shipments  or  apparent  con. 
sumption  of  iron  ores  Pennsylvania  takes  precedence  of  Alabama. 

Alabama  is  therefore  placed  second  as  a  producer  of  iron  ore, 
with  1,670,319  long  tons,  valued  at  $1,611,611,  an  average  of  96 
cents  per  ton.  These  figures  represent  10.82  and  4.53  per  cent, 
respectively,  of  the  total  output  and  value. 

Pennsylvania  closely  follows  Alabama,  its  output  being  1,560,234 
long  tons,  valued  at  $3,063,534,  an  average  of  $1.96  per  ton,  and 
10.75  and  9.19  per  cent,  respectively,  of  the  total  output  and 
value. 

The  other  State  which  produced  over  1,000,000  tons  in  the  pres- 
ent  census  j'ear  was  New  York,  which  is  credited  with  1,247,537 
long  tons,  valued  at  $3,100,216,  an  average  of  2.49  per  ton,  the 
figures  representing,  respectively,  8.59  and  9.30  per  cent  of  the 
total  output  and  value. 

These  four  States  therefore  produced  a  total  of  10,234,259  long 
tons,  or  70.49  per  cent  of  the  entire  output  of  the  iron-ore  mines 
of  the  United  States,  while  the  value  of  the  ore  aggregates 
$23,476,882,  or  70.39  per  cent  of  the  total  valuation.  .  .  . 

Although  the  iron  ores  of  the  United  States  are  very  liberally 
distributed,  the  production  in  the  year  1889  came  from  conipara. 
tively  limited  areas.  This  statement  will  be  made  more  prominent 
by  taking  the  output  of  various  sections  of  the  country  for  this 
purpose. 

If  the  United  States  be  divided  into  eastern  and  western  sec- 
tions by  the  most  prominent  physical  feature,  namely  the  ^lissis- 
sippi  River,  ai.'  connecting  the  headwaters  of  this  stream  by  an 
imaginary  lint  v'ith  the  Lake  of  the  "Woods,  the  output  of  that 
portion  of  the  United  States  east  of  this  division  in  1889  was 
14,043,782  long  tons,  or  96.73  per  cent  of  the  total  production  of 
the  United  States,  and  that  of  the  western  division  474,259  long 
tons,  or  3.27  per  cent.  If  the  eastern  division  is  again  subdivided 
by  a  line  nearly  east  and  west,  following  the  Ohio  and  Potomac 
rivers,  uniting  these  along  the  southern  boundary  of  Pennsyl- 
vania, the  northern  portion  produced  11,153,282  long  tons  in  1889, 
or  79.42  per  cent  of  the  output  of  the  eastern  division  and  76.82 


h 


APPENDIX  V. 


531 


immencing  May  1, 
tiled  record  of  the 

during  the  three 
of  Pennsylvania  is 
■  to  supply  absolute 
its  or  apparent  con. 
ience  of  Alabama, 
roducer  of  iron  ore, 
1,  an  average  of  96 

and  4.53  per  cent, 

put  being  1,560,2»4 

$1.96  per  ton,  and 

le  total  output  and 

00  tons  in  the  pres. 
lited  with  1,247,537 
of  2.49  per  ton,  the 
.30  per  cent  of  the 

lof  10,234,259  long 

the  iron-ore  mines 

the   ore   aggregates 

nation.  .  .  • 

es  are  very  liberally 

came  from  compara- 

lade  more  prominent 

le  country  for  this 


f 


rn  and  western  see- 
namely   the  Missis. 
this  stream  by  an 
the  output  of  that 
ivision  in  1889  was 
total  production  of 
ision  474,259  long 
is  again  subdivided 
Ohio  and  Potomac 
^ndary  of  Pennsyl- 
2  long  tons  in  1889, 
division  and  76.82 


per  cent  of  the  total  for  the  United  States,  and  the  southern  portion 
2,890,500  long  tons,  or  20.58  percent  of  the  product  of  the  eastern 
division  and  19.91  per  cent  of  the  total  for  the  United  States. 

Adding  to  the  stock  of  iron  ore  on  hand  Jan.  1,  1889,  1,966,824 
long  tons,  the  production  for  the  year,  14,618,041  tons,  and  de- 
ducting the  stock  on  hand  Jan.  1,  1890,  2,256,973  long  tons,  there 
is  an  apparent  total  consumption  of  14,227,892  tons,  valued  at 
§32,766,506.  To  this  apparent  consumption,  however,  should  be 
added:  (1)  the  materials  which  are  charged  into  blast  furnaces  as 
ore,  but  which  are  products  coming  from  the  puddling  and  heating 
furnaces  and  the  rolls  and  hammers  of  rolling  mills;  (2)  the 
materials  from  the  retorts  in  which  the  franklinite  of  New  Jersey 
is  treated  for  the  removal  of  zinc,  leaving  as  a  residuum  a  mixture 
of  iron  and  manganese  oxides,  employed  in  blast  furnaces  for  pro- 
ducing spiegeleisen;  and  (3)  the  blue  billy  or  purple  ore,  the  re- 
siduum of  pyrites  burned  to  produce  sulphuric  acid,  and  some  of 
the  silicates  of  iron,  which,  as  cinder,  result  from  the  treatment  of 
copper  ores,  may  also  be  utilized  and  smelted  as  iron  ores. 

The  following  resume  illustrates  the  apparent  consumption  of 
iron  ore  and  materials  used  as  iron  ore  in  the  year  1889 :  — 

APPROXIMATE  CONSUMPTION  OF  IRON  ORE,  ETC.,  BY  VARIOUS 

INDUSTRIES  IN  1889. 

[Long  tons.] 


Items 

Total. 

Used  in 

Rolling  Mills, 

Forges,  etc. 

Caed  in 

Silver 

Smelting. 

Used  in 

Blast 

Furnaces, 

Total 

15,733,405 

424,500 

167,908 

15,151,057 

Domestic  iron  ore  ...    . 

Foreign  iron  ore     .... 

Mill  cinder,  scale,  residuum, 
bluL'  billy,  etc 

14,227,892 
853,573 

652,000 

417.000 
7,500 

167,908 

13,662,984 
846,073 

652,000 

Comparing  the  figures  for  the  census  year  ended  Doc.  31,  1889, 
with  the  census  year  1880,  it  is  found  that  a  total  of  7,120,362 
long  tons  of  ore  were  mined  in  1880,  valued  at  $23,156,957,  while 
the  production  of   the  census  year  1889  shows  a  total  output  of 


-;;-«;• 


11 


hi'' 


lit  .1 


682 


ECONOMIC  HISTORY. 


14,618,041  long  tons,  valued  at  $33,351,978,  an  increase  of 
-7,i>97,C79  long  tonsy  or  103.89  per  cent,  over  the  production  uf 
1880,  and  an  augmented  value  of  $10,195,021,  or  44.03  per  cent. 

The  average  value  per  ton  of  iron  ore  at  the  mines  has'  been  re- 
duced  from  $3.25  per  long  ton  in  1880  to  $2.30  per  ton  in  1889. 
This  is  due  to  the  consolidation  of  a  number  of  mines  which  have 
been  grouped  under  one  management,  reducing  the  cost  of  superin- 
tendence,  office  force,  administration,  etc.,  encouraging  the  use  of 
improved  machinery  and  permitting  systematic  and  advanced  nietli. 
ods  of  mining,  greatly  increasing  the  output  of  the  mines,  Tlio 
reduced  freight  rates,  due  to  improved  facilities,  shipping  and  re- 
ceiving docks,  special  vessels  and  cars  having  been  built  for  ore- 
handling  and  transportation,  render  the  competition  between  the 
mines  much  keener  than  in  1880.  The  low  cost  of  mining  ore  in 
the  Southern  States  has  also  contributed  to  this  diminution  of  value 
at  the  mines. 

Iron  ore  was  obtained  from  twenty-three  States  in  1880,  aiul  all 
of  these  States,  with  the  exception  of  Indiana  and  Vermont,  were 
producers,  as  reported  to  the  Eleventh  Census.  In  addition  to  the 
States  which  mined  ore  as  reported  to  the  Tenth  Census,  there  are 
added  Colorado,  Idaho,  Minnesota,  Montana,  New  Mexico,  Utah, 
and  Washington  as  new  producers  for  the  Eleventh  Census.  Of 
these,  Colorado  and  Minnesota  were  the  only  States  which  contrib- 
uted largely  to  the  output  of  1889.   .  .   . 

The  total  value  of  the  iron-ore  mines  of  the  United  States  Dec. 
31,  1889,  was  $109,700,199,  as  against  $61,782,287  invested  in 
1880  in  regular  mining  establishments,  an  increase  of  $47,983,012, 
or  77.67  per  cent. 

The  State  of  Michigan  has  advanced  from  second  place  in  1880, 
with  a  total  reported  investment  of  $17,496,775,  to  first  position 
in  1889,  with  an  investment  of  $41,958,671,  an  increase  of 
$24,461,796,  or  nearly  140  per  cent,  or  38.23  per  cent  of  the  total 
capital  used  in  iron  ore  mining  for  the  United  States. 

Pennsylvania  occupies  second  place,  with  a  valuation  of  $16,- 
249,313,  or  14.80  per  cent  of  the  total,  a  decrease  of  $1,372,388. 
or  7.79  per  cent  from  the  1880  valuation  of  $17,621,701,  when  it 
occupied  first  place. 

New  York  follows  next,  occupying  the  same  relative  rank  as  in 
1880,  with  $12,489,481,  or  11.38  per  cent  of  the  total  valuation 
for  the  United  States,  an  increase  in  capital  of  $4,226,342,  or 
51.15  per  cent. 


APPENDIX  V. 


538 


an  increase  of 
ic  production  of 
44.03  per  cent, 
nes  has*  been  re. 
per  ton  in  1889. 
lines  which  have 
!  cost  of  superin- 
aging  the  use  of 
i  advanced  nieth- 
the  mines.     Tlio 

shipping  and  re- 
jen  built  for  ore- 
tion  between  the 
of  mining  ore  in 
minution  of  value 

)  in  1880,  and  all 
nd  Vermont,  were 
In  addition  to  the 
Census,  there  are 
BW  Mexico,  Utah, 
tenth  Census.  Of 
bes  which  contrib- 

Jnited  States  Doc. 
2,287  investi'd  in 
e  of  $47,983,912, 

knd  place  in  1880, 

K,  to  first  position 

I,    an  increase  of 

cent  of  the  total 

ates. 

t^aluation  of  ^16,- 
le  of  $1,372,388, 
1621,701,  when  it 

[dative  rank  as  in 
L  total  valuation 
k  $4,226,342,  or 


Minnesota,  which  produced  no  ore  in  1880,  Alabama,  Mis- 
souri, and  Wisconsin,  follow  in  the  order  named,  the  last  three 
occupying,  respectively,  ninth,  fifth,  and  fourteenth  places  iu 
1880. 

The  valuation  of  the  iron-ore  mines  of  the  above  seven  States  as 
reported  is  $93,422,218,  or  85.11  per  cent  of  the  total  capital  in- 
vested in  ore  mining.  .  .  . 

The  returns  recorded  show  that  the  mining  of  iron  ore  gave  em- 
ployment directly  to  38,227  persons,  an  increase  of  6,559  men,  or 
20.71  per  cent,  over  the  Tenth  Census,  when  the  number  was 
31,668  engaged  in  work  connected  with  breaking  down  and  raising 
the  ore  and  delivering  it  in  cars  or  carts  or  on  stock  piles  at  the 
mines.  This  force  was  divided  as  follows:  1,366  foremen  (680  em- 
ployed above  and  686  below  ground),  2,079  mechanics,  12,432 
miners,  21,010  laborers  (14,531  above  and  6,479  below  ground), 
820  boys  (709  being  employed  above  and  111  below  ground),  and 
520  men  in  ofhces.  Omitting  the  latter,  the  total  number  act- 
ually employed  in  handling  the  ore  was  37,707,  and  the  amount 
paid  in  wages  direct  to  miners  and  contractors  reached  a  total  of 
815,458,118.  This  would  show  an  average  earning  capacity  for 
each  man  employed  of  $409.95  per  annum,  and  includes  the  con- 
tractors' profits  and  the  additional  pay  allowed  to  foremen.  This  is 
an  increase  over  the  figures  for  1880  of  $101.01,  or  32.70  per  cent, 
which  is  due  principally  to  the  fact  that  a  larger  number  of  the 
mines  are  now  under  ground,  permitting  the  men  to  be  constantly 
employed  throughout  the  year  and  demanding  better  skill. 

The  lowest  expenditure  for  labor  per  ton  of  ore  was  in  the  States 
of  Alabama  and  Georgia  and  North  Carolina,  where  it  amounted  to 
69  and  71  cents  per  ton,  respectively,  due  to  large  open  workings 
and  modern  and  systematic  systems  of  mining,  and  in  Alabama 
and  Georgia  to  the  soft  character  of  the  ore,  etc. 

In  Pennsylvania  one  half  of  the  iron  ore  credited  to  the  State 
comes  from  the  Cornwall  ore  hills,  where  the  soft  character  of  the 
ore  and  its  accessibility  assist  in  reducing  the  average  cost  of  labor 
employed  in  mining  for  the  entire  State  to  75  cents  per  long  ton. 
The  cost  of  mining  the  hard  Lake  Superior  ores  is  best  illustrated 
in  the  State  of  Michigan,  where  $1.19  was  expended  for  wages  per 
ton  of  ore  won.  The  high  cost  in  Colorado,  Idaho,  and  Montana  is 
due  to  the  higher  rates  of  wages  prevailing  in  those  States  and  the 
small  amount  of  ore  won. 

In  the  New  England  States,  New  Jersey,  Ohio,  Delaware,  and 


534 


ECONOMIC  HISTORY. 


I- 

1'' 

1^. 


Maryland  the  exploitation  of  old  workings  or  of  scattered  deposits 
causes  a  high  cost  per  ton  for  wages.  The  use  of  improved  ma- 
chinery and  the  predominance  of  large  mines  assist  in  reducing  the 
cost  for  labor  in  Wisconsin,  Minnesota,  Alabama,  New  York,  and 
other  States.  The  partial  employment  of  convicts  in  Tennessee, 
Texas,  and  Georgia,  affects  the  figures  for  these  States. 

Michigan,  as  the  largest  producer,  naturally  gives  employment  to 
the  greatest  number  of  persons,  namely,  13,120,  or  34.32  per  cent 
of  all  the  employes  at  the  mines  of  the  United  States;  Pennsyl- 
vania follows  with  4,410  employes,  or  11.54  per  cent;  New  York 
ranks  third,  its  iron-ore  mining  industry  giving  employment  to 
3,178  persons,  or  8.31  per  cent  of  the  total  number  of  employes; 
and  Alabama  occupies  fourth  place,  which  State  reported  a  total  of 
3,122  employes,  or  8.17  per  cent.  These  four  States  had  23,830 
persons,  or  62.34  per  cent  of  the  total,  employed  in  their  iron-ore 
mines. 

Alabama  returns  the  largest  output  per  employed,  Minnesota, 
Wisconsin,  Michigan,  New  York,  Missouri,  Pennsylvania,  Georgia 
and  North  Carolina,  Tennessee,  Colorado,  New  Jersey,  Virginia 
and  West  Virginia,  and  Ohio,  following  in  the  order  named. 

The  total  cost  of  the  ore  mined,  as  represented  by  schedules  re- 
turned, aggregates  $24,781,658,  equivalent  to  an  average  cost  of 
$1.71  per  ton  of  ore  mined  against  $2.21  in  1880,  a  decrease  of 
1(0.50  per  ton,  or  22.62  per  cent.  The  difference  includes  more 
than  supplies  and  materials.  These  figures  indicate  the  advance 
made  in  labor-saving  appliances  and  improved  facilities  for  mining 
and  handling  the  product  of  the  mines. 

In  the  total  cost  of  producing  iron  ore  Alabama  is  the  only  State 
which  averages  less  -than  $1  per  ton,  namely,  82  cents.  Next  iu 
order  of  low  cost  come  Texas,  $1.05;  Tennessee,  $1.08;  Penns}!- 
vania,  $1.10;  Georgia  and  North  Carolina,  $1.14.  In  Colorado 
the  cost  of  producing  one  long  ton  of  ore,  $3.49,  is  greater  than  iu 
any  other  State. 


-"'^w-wm 


APPENDIX  V. 


585 


PRODUCTION  OF  PIG-IRON. 


William  M.  Sweet. 


ployd,   Minnesota, 
nsylvania,  Georgia 
V  Jersey,  Virginia 
>rder  named, 
ed  by  schedules  re- 
an  average  cost  of 
1880,  a  decrease  of 
snce  includes  more 
idicate  the  advance 
acilities  for  mining 


[Elerenth  Censui  Bulletin,  No.  9.] 

The  production  of  pig-iron  during  the  year  ended  June  30, 1890, 
was  the  largest  in  the  history  of  the  iron  industry  of  this  country, 
amounting  to  9,579,779  tons  of  2,000  pounds,  as  compared  with 
3,781,021  tons  produced  during  the  census  year  1880,  and  2,052,821 
tons  during  the  census  year  1870.  From  1870  to  1880  the  increase 
in  production  amounted  to  1,728,200  tons,  or  nearly  85  per  cent, 
while  from  1880  to  1890  the  increase  was  5,798,758  tons,  or  over 
153  per  cent.  The  following  table  shows  the  production  of  pig- 
iron  in  the  various  sections  of  the  country  in  the  census  years  1870, 
1880,  and  1890,  in  tons  of  2,000  pounds,  including  castings  made 
direct  from  the  furnace.  The  statistics  for  1870  and  1880  are  for 
the  census  years  ended  May  31,  but  for  1890  they  cover  the  year 
ended  June  30. 


DUTBIOTS. 


New  England  States 
Middle  States  .  .  . 
Southern  States  .  . 
Western  States  .  . 
Far  Western  States  . 


Total 


Tons  or  2,000  Pounds. 


Year  ended 
May  81, 1870. 


34,471 

1,311,649 

184,540 

622,161 


2,052,821 


Year  ended 
May  31, 1880. 


30,967 

2,401,098 

360,436 

995,.336 

3,200 


3,781,021 


Year  ended 
June  30, 1890. 


33,781 
6,216,691 
1,780,909 
2,622,351 

26,147 


9,579,779 


From  the  above  it  will  be  seen  that  the  pig-iron  industry  of  New 
England  has  been  practically  stationary  during  the  past  twenty 
years,  while  during  the  same  period,  and  especially  since  1880, 
there  has  been  a  wonderful  development  of  the  manufacture  of 
pig-iron  in  all  other  sections  of  the  country. 


686 


ECONOMIC  HISTORY. 


iff  :.•!    ■  -  '..V-  ;A-'  \^.^\■^ 
,.h-i  n  ■  .    .  ■'/■i'.  ■  ■''*..  it   ■;.  . 


v\\\ 


Hm 


The  relative  rank  of  the  various  States  is  seen  to  have  undorgune 
many  changes  since  1880.  Pennsylvania  still  retains  its  leader- 
ship as  the  producer  of  ahout  one  half  of  the  pig-iron  that  is  an- 
nually made  in  the  United  States,  i^roducing  51  per  cent  of  tlie 
total  production  in  the  census  year  1880,  and  over  49  per  cent  in 
1890.  Ohio  was  second  in  rank  in  hoth  1880  and  1890,  the  output 
of  pig-iron  in  the  former  year  being  over  14  per  cent  of  the  totul 
production  in  the  United  States,  and  in  the  latter  year  over  13  per 
cent.  Alabama,  which  occupied  tenth  place  in  1880,  with  an  out- 
put of  62,336  tons,  is  now  the  third  largest  producer  of  pig-iron, 
the  production  of  this  State  in  1890  amounting  to  890,432  tuns, 
an  increase  of  more  than  1,328  per  cent  over  the  production  of 
1880.  Illinois,  which  was  seventh  in  rank  in  1880,  is  fourtli  in 
1890,  and  New  York,  which  was  third  in  1880,  occupies  fifth  place 
in  1890.  Virginia,  which  was  seventeenth  in  rank  in  1880,  is  now 
sixth;  while  Tennessee  has  gone  from  thirteenth  to  seventh  place. 

Notwithstanding  the  fact  that  the  production  of  pig-iron  lias  in- 
creased from  3,781,021  tons  of  2,000  pounds  in  1880  to  9,n79,779 
tons  in  1890,  the  total  number  of  completed  furnaces  has  decreased 
during  the  ten  years  from  681  to  662. 

Of  the  562  completed  furnaces  at  the  close  of  the  census  year 
1890  there  were  338  in  blast,  of  which  110  were  anthracite  or  an- 
thracite and  coke  furnaces,  165  coke  and  bituminous  coal  furnaces, 
and  63  charcoal  furnaces.  The  number  of  furnaces  building  at  the 
date  mentioned  was  39,  of  which  9  were  in  Virginia,  7  in  Alabama, 
6  in  Pennsylvania,  4  in  Illinois,  3  each  in  Kentucky,  Tennessee, 
and  Michigan,  2  in  Maryland,  and  1  each  in  Georgia,  Ohio,  and 
Wisconsin. 

One  of  the  most  noticeable  features  in  the  growth  of  the  manu- 
facture of  pig-iron  in  this  country  during  the  past  decade  is  the 
development  of  the  blast-furnace  industry  of  the  Southern  States. 
In  1880  the  South  had  already  commenced  to  appreciate  the  value 
of  the  extensive  deposits  of  iron  ore  and  coal  within  her  borders 
and  to  realize  the  superior  advantages  which  she  possessed  for  the 
cheap  production  of  pig-iron,  owing  to  the  close  proximity  to  each 
other  of  these  materials,  and  a  number  of  large  coke  furnaces  were 
built  in  that  year  and  the  few  succeeding  years.  The  greatest 
activity,  however,  in  undertaking  new  furnace  plants  was  in  1887, 
during  which  year  5  new  furnaces  were  blown  in  and  25  others 
were  under  construction.  There  has  been  but  little  abatement  in 
this  activity  to  the  present  time. 


APPENDIX  V. 


687 


have  undergone 
aina  ita  leader- 
iron  that  is  an- 
per  cent  o£  the 
:  49  per  cent  in 
1890,  the  outimt 
jont  of  the  total 
year  over  13  jter 
180,  with  an  out- 
ucpr  of  pig-iron, 
to  890,432  tons, 
he  production  of 
880,  is  fourth  in 
jcupies  fifth  pliiee 
ik  in  1880,  is  now 
to  seventh  place. 
f  pig-iron  has  in- 
1880  to  9,579,779 
aces  has  decreased 

)f  the  census  year 
anthracite  or  an- 
iious  coal  furnaces, 
;e8  building  at  the 
nia,  7  in  Alabama, 
itucky,  Tennessee, 
Georgia,  Ohio,  and 

lowth  of  the  nianu- 
Ipast  decade  is  the 
Southern  States. 
)preciate  the  value 
rithin  her  borders 
possessed  for  the 
proximity  to  each 
I  coke  furnaces  were 
lars.     The  greatest 
jlants  was  in  1887, 
in  and  25  others 
kittle  abatement  iu 


The  greatest  activity  in  the  development  of  the  Southern  pig- 
iron  industry  during  the  past  decade  was  in  Alabama.     This  State 
produced  in  the  census  year  1890,  one  half  of  all  the  pig-iron  made 
in  the  South,  and  was  only  exceeded  in  production  in  the  United 
States  by  Pennsylvania  and  Ohio.     Virginia  and  Tennessee  now 
occupy,  respectively,  second  and  third  places  among  the  pig-iron 
producing  States  of  the  South.      Prior  to  the  census  year  1890 
Tennessee  was  the  second  leading  manufacturer  of  pig-iron  in  that 
section,  but  the  activity  which  has  been  noticeable  during  the  past 
few  years  in  Virginia,  in  the  erection  of  new  furnaces  has  placed 
tills  State  next  to  Alabama  amonir  Southern  States  in  the  (piuntity 
of  pig-iron  produced.      In  1880,  West  Virginia  was  the  leading 
producer  of  pig-iron  in  the  South,  but  in  1890  it  was  fourth  in 
rank.     The  manufacture  of  pig-iron  in  Kentucky  and  Georgia  has 
been  practically  stationary  during  the  past  decade,  and  prior  to  the 
census  year  1890  but  little  progress  had  been  made  by  Texas.    Two 
charcoal  furnaces  were  building  in  that  State  in  the  census  year 
1890,  both  of  which  were  completed  but  not  blown  in  at  the  close  of 
that  year.     All  of  the  furnaces  in  North  Carolina,  seven  in  num- 
ber, were  idle  in  1880,  and  since  that  year  very  little  activity'  has 
been  shown  in  the  erection  of  new  works,  while  the  seven  furnaces 
referred  to  have  either  been  abandoned  or  are  now  classed  as  long- 
inactive    furnaces.      With  the  exception  of   West  Virginia  and 
Maryland,  nearly  all  the  pig-iron  made  in  the  South  is  produced 
from  southern  ores,  and  of  the  quantity  produced  b}'  the  use  of 
mineral  fuel,   much  the  larger  part  is  made  from  southern  coke. 
Most  of  the  pig-iron  made  in  West  Virginia  is  produced  from  Lake 
Superior    ores.     In  Maryland  the  recent  building  of  four   large 
cuke  furnaces  by  the  Pennsylvania  Steel  Company,  at  Sparrow's 
Point,  near  Baltimore,  to  smelt  iron  ores  from  Cuba,  has  suddenly 
br  ught  this  State  more  prominently  forward  as  a  manufacturer  of 
pig-iron.     Two  of  the  furnaces  were  blown  in  during  the  census 
year  1890,  and  of  the  other  two,  one  is  completed  and  ready  for 
operation.  .  .  . 

The  following  table  shows  the  production  of  pig-iron  in  the 
United  States,  in  tons  of  2,000  pounds,  in  the  census  years  1880 
and  1890,  arranged  according  to  the  fuel  used,  with  the  percentage 
of  increase  or  decrease  in  production  in.  1890 :  — 


688 


ECONOMIC  HISTORY. 


m  'I 


I ''I 


f-' 


ru«i  UMd. 


Anthracite  alone 

Mixed  antliracite  coal  and  coke, 
Colce  and  bituminous  coal     .    . 

Charcoal 

Caitinga  direct  from  furnace     . 

Total 


Year  eDdwi 
U»y  81, 1880. 


Torn, 

1,112,786 
713,082 

1,516,107 

486,018 

4,220 


3,781,021 


Year  ended 
Juu«3t),18UO. 


Ton$. 

823,258 
1,879.008 
6,711,074 

666,620 
0,920 


0,670,779 


Peieentaga 

of  Iiicreaae 

In  18U0. 


163.20 

848  00 

60.H0 

184.78 


163.36 


PerrcDtaK* 

of  Dtfri'iiM 

In  IHUO. 


70,06 


The  foregoing  figures  clearly  exhibit  the  important  part  that 
bituminous  coal  and  coke  have  taken  in  the  growth  of  the  pig-iron 
industry  since  1880.  The  larger  proportion  of  the  production  of 
pig-iron  credited  to  these  fuels  is  made  from  coke  alone.  A  few 
furnaces  use  raw  bituminous  coal  only,  and  their  production  U 
included  in  the  total  for  coke  and  bituminous  coal.  In  tlm  use 
of  anthracite  coal  alone  as  a  blast-furnace  fuel  there  is  seen  to 
have  been  a  marked  decrease  since  1880,  while  the  production  of 
pig-iron  with  mixed  anthracite  coal  and  coke  has  more  than 
doubled.  .  .  . 


PRODUCTION  OF  STEEL. 


William  M.  Sweet. 


■I  r  I      '  «'  "    • 


JLlL._._,f,^jj^  U  ^..i 


hi 


[Eleventh  Census  Bulletin,  No.  13.] 

The  total  production  of  steel  in  the  United  States  in  the  form  of 
ingots  or  direct  castings  during  the  year  ended  June  30,  1890, 
amounted  to  4,466,926  tons  of  2,000  pounds,  as  compared  with 
1,145,711  tons  produced  during  the  year  ended  May  31,  1880;  an 
increase  of  3,321,215  tons,  or  290  per  cent. 

The  following  table  gives  the  production  of  the  various  kinds  of 
steel  in  the  form  of  ingots  or  direct  castings  in  1880  and  1890. 
The  statistics  for  1880  are  for  the  census  year  ended  May  31, 1880, 
but  for  1890  they  cover  the  fiscal  year  ended  June  30,  1890.  A 
few  steel  works  produce  blister,  cemented,  and  other  miscellane- 
ous steel,  but  the  quantity  made  annually  is  very  small,  and  the 
statistics  thereof  for  1880  and  1890  are  not  included  in  the  table 
below. 


APPENDIX  V. 


689 


States  in  the  form  of 
,ded  June  30,  1890, 
as  compared  witli 
id  May  31,  1880;  an 

the  various  kinds  o{ 
L  in  1880  and  1890. 
fended  May  31, 1880, 
|d  June  30,  1890.    A 

3d  other  miscellaiie- 
I  very  small,  and  the 
Included  in  the  table 


KiHDt  or  Bran. 
(logoU  or  dittot  cMtingf.) 


Bcuemer  steel    .    .    . 
Open-hearth  steel    . 
Crucible  steel .    .    . 
Clapp-Qrifflths  steel 
Robert-Bessemer  steel . 


Total 


ToNi  or  3,000  PouMDs. 


Ye«r  sndpd 
May  ai,  1880. 


986.208 
84,802 
76,201 


1,145,711 


Ya»r  t'DdPil 
JUM  aO,  18S0. 


3,788,672 

604,361 

86,636 

83,063 

4,604 


4,466,020 


During  1880  fourteen  States  contained  steel-making  establish- 
ments, and  steel  was  produced  in  that  year  in  each  of  these  States 
except  Rhode  Island  and  Maryland.  In  1890  steel  works  were 
located  in  nineteen  States,  and  steel  was  made  in  that  year  in  each 
of  these  States  except  Kentucky,  Missouri,  and  Virginia. 

Pennsylvania  continues  to  occupy  the  position  of  the  leading 
producer  of  steel  in  the  United  States,  producing  67  per  cent  of 
the  total  production  in  1880,  and  62  per  cent  in  1890.  Illinois 
was  second  in  rank  in  both  years,  and  Ohio  was  third.  From  1880 
to  1890  the  increase  in  production  in  Pennsylvania  was  324  per 
cent,  in  Illinois  241  per  cent,  and  in  Ohio  314  per  cent.  Since 
1880  the  manufacture  of  steel  has  been  abandoned  in  two  States, 
namely,  Rhode  Island  and  Vermont,  and  seven  States  have  engaged 
in  its  production,  namely,  Alabama, California,  Colorado,  Indiana, 
Michigan,  Virginia,  and  West  Virginia.  .  .  . 

The  remarkable  growth  that  has  taken  place  in  the  Bessemer 
steel  industry  of  this  country  during  tlie  past  ten  years  is  well 
shown  by  the  above  figures.  The  increase  in  the  number  of  estab- 
lishmeiils  prcdiicing  Bessemer  steel  has  been  the  result  almost  en- 
tirely of  the  demand  for  steel  in  forms  other  than  rails.  All  of 
the  eleven  Bessemer  steel  plants  that  were  completed  in  1880  had 
been  built  to  manufacture  steel  for  rails,  many  of  them  being  added 
to  previously  existing  iron  rail  mills.  Of  the  fifty-three  Bessemer 
steel  plants  at  the  close  of  1890  only  fourteen  made  steel  rails  dur- 
ing that  year,  and  of  the  total  quantity  of  rails  produced  over  90 
per  cent  was  made  by  ten  of  these  works.     Thus,  while  the  pro- 


640 


ECONOMIC  HISTORY. 


m 


duction  of  steel  rails  has  nearly  trebled  in  amount  since  1880.  the 
number  of  establishments  engaged  in  their  manufacture  has  shown 
but  little  change  in  the  ten  years,  although  many  of  these  works 
have  greatly  increased  in  size  and  efficiency.  The  competition  in 
the  manufacture  of  Bessemer  steel  rails  has  compelled  many  of  the 
rail  mills  to  convert  a  large  part  of  the  steel  produced  by  tliem  into 
forms  other  than  rails,  the  production  of  rails  to  any  considerablu 
extent  at  the  present  time  being  j)ossible  only  in  works  fuvoralilv 
located  for  the  supply  of  cheap  raw  materials  and  ojierated  under 
the  latest  and  most  improved  methods  of  manufacture.  Included 
in  the  total  production  of  l>essemer  steel  rails  during  1890  were 
G5,273  tons  rolled  in  iron  rolling  mills  from  purchased  Bessemer 
steel  blooms. 

Wliile  the  demard  for  steel  rails  has  shown  a  remarkable  growth 
since  1880,  thereby  forcing  a  practical  discontinuance  of  the  manu- 
facture of  iron  rails,  there  has  also  been  a  rai)idly  increasing  use  of 
steel  for  nails,  bars,  rods,  wire,  and  other  miscellaneous  forms. 
The  growth  of  the  Bessemer  steel  industry  in  this  direction  is 
clearly  shown  in  the  number  of  plants  that  have  been  added  to 
iron  rolling  mills  during  the  past  ten  years  for  the  purjwse  of 
manufacturing  steel  in  forms  other  than  rails.  The  increased 
quantity  of  Bessemer  steel  manufactured  in  these  miscellaneous 
forms  is  approximately  shown  by  a  comparison  of  the  ingots  and 
rails  produced,  over  75  per  cent  of  the  ingots  made  in  1880  being 
converted  into  rails,  while  in  1890  the  percentage  of  rails  made  to 
ingots  produced  was  only  53  per  cent. 

The  production  of  open-hearth  steel  in  the  form  of  ingots  or  di- 
rect castings  during  1890  amounted  to  504,351  tons  of  2,000 
pounds,  as  compared  with  84,302  tons  made  during  1880.  In  1880 
there  were  25  establishments  containing  open-hearth  steel  plant?, 
located  in  ten  States,  and  in  1890  there  were  58  establishment^ 
containing  open-hearth  steel  plants,  located  in  twelve  States. 
Since  1880  the  manufacture  of  open-hearth  steel  has  been  aban- 
doned in  two  States,  Vermont  and  Rhode  Island,  and  four  States 
have  engaged  in  its  maniifa<iture,  New  York,  Alabama,  Indiana, 
and  California.  During  the  past  few  years  great  activity  has  taken 
place  in  the  erection  of  open-hearth  s'leel  plants,  and  indication! 
point  to  a  still  larger  production  of  this  kind  of  steel  during  the 
next  few  years. 

The  crucible  steel  industry  has  shown  but  little  progress  since 
1880,   the   production  in  that  year  amounting  to  76,201  tuns  of 


APPENDIX  V. 


541 


since  1880,  the 
,cture  has  shown 
y  of  these  works 
e  competition  in 
lied  many  of  the 
ced  by  them  into 

any  consideiablu 
\  works  favorably 
,d  operated  uutliT 
acture.  Incliuka 
during  18^0  were 
irchased  Bessemer 

remarkable  growth 
lance  of  the  n\anu- 
ly  increasing  use  of 
iscuUaneous  forms. 
u  this  direction  is 
lave  been  added  to 
for  the  purpose  of 
il8.      The  increased 
these  miscellaneous 
of  the  ingots  and 
made  \n  1880  being 
age  of  rails  made  to 


orm  of  ingots  or  di- 
351  tons   of   2,000 
'ring  1880.    In  1880 
hearth  steel  plants, 
e  58  establishment^^ 
in    twelve  States. 
,teel  has  been  abau- 
and,  and  four  States 
,  Alabama,  Indiana, 
'at  activity  has  taken 
tnts,  and  indications 
of  steel  during  tlw 

little  progress  since 
Lg  to  70,201  tons  ol 


2,000  pounds,  as  compared  with  85,536  tons  produced  in  1890. 
In  1880  tliere  were  36  establishments  containing  crucible  steel 
plants,  located  in  nine  States,  while  in  1890  the  number  of  estab- 
lishments had  increased  to  47,  located  in  eleven  States.  For  pur- 
poses requiring  Ki>ecial  grades  of  steel  tlie  product  of  the  crucible 
process  will  be  always  in  demand,  but  the  high  cost  of  manufacture 
prevents  it  in  many  instances  from  successfully  competing  in  price 
with  the  other  processes  mentioned. 

The  iirst  basic  steel  made  in  the  United  States  was  produced  ex- 
perimentally at  Steelton,  Pennsylvania,  by  the  Pennsylvania  Steel 
Co.  on  ^lay  24,  1884,  in  a  Bessemer  converter.  The  beginning  of 
the  manufacture  of  basic  steel  in  this  country  as  a  commercial 
product,  however,  dates  from  1888,  on  the  28th  of  March  of  which 
year  the  first  basic  open-hearth  steel  was  i)roduced  at  the  Home- 
stead Steel  Works  of  Carnegie,  Phipps,  »&  Company,  Limited,  at 
Homestead,  near  Pittsburgh,  Pennsylvania.  Since  that  date  the 
manufacture  of  basic  open-hearth  steel  has  been  continued  at  these 
works,  ana  during  1800  this  firm  commenced  the  erection  of  eight 
additional  open-hearth  furnaces  for  the  manufacture  of  basic  steel, 
of  wliich  number  four  are  now  in  operation,  and  the  remaining  four 
furnaces  are  expected  to  be  ready  for  working  in  a  short  time. 
When  completed  these  works  will  contain  16  open-hearth  furnaces 
prepared  to  manufacture  basic  steel.  The  manufacture  of  has "  ^  steel 
is  now  also  regularly  carried  on  at  the  Steelton  works  of  the  Penn- 
sylvania Steel  Company,  where  a  combination  of  the  Bessemer  and 
open-hearth  processes  is  used.  During  1890  the  Henderson  Steel 
aiul  Manufactuving  Company,  at  Birmingham,  Alabama,  produced 
steel  experimentally  by  the  basic  process.  Since  the  close  of  the 
year  the  Southern  Iron  Company  has  successfully  commenced  the 
manufacture  of  basic  ojien-hcarth  steel  at  its  works  at  Chattanooga, 
Tennessee.  The  Pottstown  Iron  Company,  at  Pottstown,  Pennsyl- 
vania, iia;  also  i»r<)duced  steel  by  the  basic  process. 

In  Great  Britain  and  on  the  Continent  the  basic  process  has  been 
received  with  grf  at  favor,  and  large  quantities  of  basic  steel  are 
made  aumially  by  all  the  leading  iron  and  steel  producing  countries 
aliroail.  The  wonderful  growth  of  the  steel  industry  of  Germany 
and  Luxemburg  during  recent  years  has  followed  the  introduction 
iif  tliis  process,  the  iron  ores  of  these  countries  being  especially 
suited  to  the  manufacture  of  basic  steel. 

While  the  basic  process  is  applicable  to  either  the  Bessemer  or 
I  open-hearth  process,  its  use  in  this  country  in  connection  with  the 


542 


ECONOMIC  HISTORY. 


m 


open-hearth  furnace  is  most  promising  of  successful  results,  and 
the  indications  are  that  the  growth  of  the  basic  steel  industry  of 
the  United  States  will  be  largely  in  this  direction.  The  total  pro- 
duction of  basic  steel  in  the  United  States  during  1890  auiounted 
to  62,173  tons  of  2,000  pounds,  nearly  all  of  which  was  made  by 
the  basic  open-hearth  method,  a  small  part  being  produced  by  the 
duplex  process,  a  combination  of  the  Bessemer  and  02>en-lieartli 
methods.  • 


MUNICIPAL  RECEIPTS  AND  EXPENDITURES. 

lioBERT  r.  Porter. 

[Eleventh  Census  Bulletin,  No.  82.] 

The  statistics  of  this  bulletin  showing  in  detail  the  receipts  and 
expenditures  for  one  year  of  one  hundred  principal  or  representative 
cities  in  the  United  States,  aggregating  a  population  of  12,4L'r),.S()(i, 
or  about  two  thirds  of  the  urban  population  of  the  United  States, 
have  been  prepared  by  Mr.  J.  K.  Upton.  The  following  talile 
shows  the  total  receipts  and  expenditures  as  classified  by  the 
detailed  statement :  — 


RECEIPTS. 

tnxen »189,283,!i26 

SpcrJHl  assessments,  streets  and 

bridges 13,296,035 

Special  assessments,  sewers    .    .  1,380,057 

Licenses  I  ^''«"°' 11,782,307 

""*"'*"  I  Other 8,411,539 

Fees,  fines,  and  penalties  .  2,714,464 

Waterworks 18,826,280 

Interest  on  deposits 576,067 

Income  from  funds  and  invest- 
ments    10,952,461 

Miscellaneous 12,880,088 


Total  ordinary  receipts   .    ,  9215,001,448 

lx«ns 84,852,668 

Funds  and  transfers     ....  18,381,678 
From  State  or  county  ....  6,443,947 
Balance,  cash  on  band  begin- 
ning of  year 85,844,656 


Grand  total •869,024,802 


EXPENDITURES. 

Libraries 

Schools 

Fire 

Health 

Lighting 

Police 

Charitable  objects  .     . 

Streets  and  bridges 

Severs 

Buildings  and  improTen-.entH 
Parks  and  public  grounds 

Salaries 

Waterworks 

Interest  on  debt   ...... 

Miscellaneous  .  


S818.2n2 
2ti,l;i(*,i;3 
11,865,402 

2,2»0,317 

7,747,31.3 
17,HlT,4ao 

7,ltiC,9Ca 
33.,W,2(:9 

6,943,519 

9,:u>.o:o 

12  im2,494 
ll,K;)a,4u3 
Ili,0S6,Tol 
32,25(1,368 
34,861,043 


Total  ordinary  expenses  .    .  $234,626,655 

Loan« W,4«8,191 

Funds  and  tmnsfers     ....  28,330,335 
Balance,  cash  on  hand  at  end  of 

year 36,5Td,r.>3 


Grand  total «359,024,G!'2 


APPENDIX  V. 


543 


isful  results,  ami 
steel  industry  of 
I.  The  total  pro- 
ig  1890  amounted 
ich  was  made  by 
g  produced  by  the 
and  open-he;i.rth 


^DITURES. 


,il  the  receipts  aiul 
il  or  representative 
tion  of  12,4l.'r),.S(i(i, 
the  United  States, 
lie  following  taiile 
»  classified  by  tlie 


INDITURES. 

S?81S,2n2 

26,V.'?,n3 

11,865,402 

2,2s0,3n 

7,:4T,313 

17,Hn,435 

7,lt)6,9C'l 

33.580,209 

6,943,619 

ovenients 

9,7if>.o:o 

'oundB 

12  I1T2.494 

ll,Si3,4!lS 

l!i,flS6,7ol 

32,250,368 

34,861,043 

expenses  .    . 

$234,626,656 
69,488,191 

1     .    .    *    • 

28,330,335 

Lnd  Rt  end  of 


36,67«,11>3 


Comparing  detailed  amounts  expended  by  cities  with  those  ex- 
pended by  States,  the  magnitude  of  municipal  expenditures  is 
clearly  exhibited. 

Omitting  amounts  on  account  of  loans,  transfers,  and  funds,  the 
ordinary  expenditures  of  the  State  of  Massachusetts  for  the  year 
ending  Dec.  31,  1889,  as  compiled  by  this  office,  was  $4,955,069. 
With  like  omissions,  the  expenditures  for  the  city  of  Boston  for 
tlie  year  named  amounted  to  $16,117,043.  Like  ordinary  expendi- 
tures of  the  States  of  New  York,  Massachusetts,  IVnnsylvania, 
Ohio,  Missouri,  and  Illinois,  the  six  largest  States  in  the  Union  in 
population,  for  one  year  amounted  in  the  aggregate  to  $28,859,010, 
while  in  the  same  period  the  ordinary  expenditures  of  New  York 
City  alone  amounted  to  $48,937,694.  The  State  of  New  York  ex- 
pended in  1889,  for  legislative,  executive,  and  judicial  purposes 
81,619,127,  an  amount  considerably  exceeding  like  expenditures  in 
any  other  State ;  but  the  amount  for  the  same  period  jiaid  for  sal- 
arii's  alone  for  such  purposes  in  certain  cities  was  as  follows:  New 
York,  $3,488,834;  Brooklyn,  $2,325,684;  Philadelphia,  $1,131,376. 

NATIONAL,    STATE,   AND  COUNTY  INDEBTEDNESS. 

Robert  P.  Pohter. 

[Eleventh  Census  Bulletin,  No.  64.] 

The  total  and  per  capita  indebtedness  of  soventy-nine  foreign 
nations,  tlie  United  States,  the  several  States,  and  ti!(>ir  respective 
eounties,  given  in  the  present  bulletin,  was  prepared  by  jNIr.  J.  K. 
Upton.  The  indebtedness  of  the  world  for  1890  and  1880,  as  far 
as  it  has  been  possible  to  collect  the  data  for  this  bulletin,  with 
the  amount  of  increase  or  decrease,  is  as  follows:  — 


$359,024,3(13 


Divisions. 

Dkbt  Less  Si.nkino  Fund. 

Increase. 

Decrease. 

PER  Capita. 

1890. 

1880. 

18B0. 

53  82 

33.36 
14.63 

3.56 
2  27 

1880. 

Total.    .    .    . 

Si26,917,0'J6,680 

$26,818,521,219 

.91,098,575,461 

80.73 

Fotpign  nations  . 

The  United  States 

States  and  terrl- 
torios      .    .     . 

Counties    .    .     , 

925,636,075,840 
915,962,112 

223,107,883 
141,950,845 

J»23,481 ,572,185 
1,922,517,804 

200,826,643 
121,105,027 

»2,154,503,666 
17,845,818 

?l,006,o55,2,-2 
67,218,760 


34.14 

38  33 

6.79 
2.47 

644 


ECONOMIC  HISTORY. 


'{.JT  I 


J>  1' 


From  the  summary  published  it  will  be  seen  that  relatively  the 
burden  of  debt  falls  far  heavier  upon  the  inhabitants  of  the  prin- 
cipal foreign  countries,  except  those  of  Germany,  than  upon  those 
of  this  country.  France  in  1889  had  a  debt  per  capita  of  f  116,3a, 
and  it  is  understood  that  this  does  not  include  certain  annuities  rif 
an  unstated  but  large  amount;  Great  Britain,  though  slowly  de- 
creasing its  debt,  had  a  burden  at  that  time  of  $87.79  per  capita; 
Russia,  $30.79;  Austria-Hungary,  $70.84;  Italy,  $76.06;  Belgium, 
$63.10;  The  Netherlands,  $95.56,  while  that  of  the  United  Status 
was  but  $14.63,  and  of  its  indebtedness  nearly  one  half  was  made 
up  of  non-interest-bearing  notes. 

While  individual  fluctuations  in  the  amounts  of  indebtedness  of 
the  seventy-nine  foreign  nations  reported  have  been  consideraMe 
during  the  decade,  the  aggregated  indebtedness  shows  relatively 
but  little  change,  especially  if  compared  with  the  increase  of 
population. 

The  public  debt  of  the  United  States  shows  a  gratifjnng  decrease 
within  the  last  ten  j'ears,  the  burden  per  capita  having  been  re- 
duced from  $38.33  in  1880  to  $14.63  in  1890. 

The  indebtedness  of  the  States  and  Territories  has  also  decreased 
$67,218,760  during  the  decade,  reducing  the  per  capita  from  85.79 
in  1880  to  $3.56  in  1890.  It  should  be  remembered,  however,  tliat 
of  the  total  decrease  of  State  debt  as  reported  there  has  been  scaled 
by  refunding  in  some  of  the  Southern  States  about  $28,500,000. 

The  indebtedness  of  the  counties,  though  increasing  somewhat 
within  the  decade,  has  not  kept  pace  with  the  increase  of  popula- 
tion, and  the  per  capita  has  been  reduced  from  $2.47  in  1880,  to 
$2.27  ill  1890. 

Aggregating  the  national.  State,  and  county  indebtedness,  the 
per  capita  shows  a  decrease  from  $46.59  in  1880  to  $20.46  in  1890, 
or  more  than  one  half,  and  this  decrease  has  been  brought  about 
mainly  by  voluntary  taxat'on.  Tlie  aggregate  surplus  receipts  of 
another  decade  like  the  oae  just  past  would  relieve  the  country 
from  nearly  all  national.  State,  and  county  indebtedness  could  they 
be  distributed  for  the  purpose. 


A  SELECT  BIBLIOGRAPHY  OF  ECONOMICS. 


Abram,  E.    Preston  Guild  Merchant.    Preston,  1882. 

About,  E.    Handbook  of  Social  Economy.     N.  Y.,  1873. 

Acworth,  W.  M.     The  Railways  of  England,  2d  ed.     London,  1890. 

The  Railways  of  Scotland.     London,  1890. 

The  Railways  and  the  Traders,  2d  ed.     London,  1891. 

Adams,  Charles  F.,  Jr.     Railroad  and  Railroad  Questions.    X.  Y.,  1878. 

Notes  on  Railroad  Accidents.     N.  Y.,  1880. 

Railroads.     Their  Origin  and  Problems.     Rev.  ed.     N.  Y.,  1880. 

and  Henry.     Chapters  of  Erie.    N.  Y.,  1880. 

Adams,  C.  K.     A  Manual  of  Historical  Literature.    3d  ed.    N.  Y.  1889. 
Adams,  Henry  C.     Taxation  in  the  United  States,  1789-1810.    2d  ed., 
Ann  Arbor,  1880. 

Relation  of  the  Stat«  to  Industrial  Action.    [Bait.],  1897.    pp.85. 

Public  Debts,  N.  Y.,  2d  ed.     1890. 

Adams,  John  Quincy.      Report  upon  Weights  and  Measures,  1817. 

Washington,  1821. 
Adler,   O.    Rodbertus  der  Begriinder  des  wiss.-Sozialismus. 

1883. 

Gesch.    d.  sozialpolit.  Arbeiterbewegung  in  Deuhchland. 

1885. 

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INDEX. 


Ad  valorem  duties,  principle  of,  186. 

Agriculture,  system  of,  in  tlie  18th  cen- 
tury, 58;  in  tlie  lOtli,  03;  injured  by 
commercial  legislation,  67;  importance 
to  Germany  of,  181 ;  condition  of,  in  Eng- 
land, 212,  215,  21!),  220;  in  Ireland,  233- 
237  ;  Itaiiun,  303 ;  effects  of  improve- 
ments on,  211,  313-316,  320-321. 

Alsace-Lorriiine,  50,  330. 

Ancien  ri'glnie,  budget  of,  76. 

Anjou,  system  of  nu'tairie  in,  62. 

Annuities,  conversion  of  perpetual  into 
terminable,  140-141. 

Anti-Corn-Law  League,  formation  of,  214; 
object  of,  210;  intlucnce  of,  218,  229. 

Arkwriglit,  Sir  Richard,  his  invention  of 
the  water-frame,  39,  40,  129. 

Army,  organization  of,  under  Louis  XVL, 
83;  alisence  of  standing,  in  America, 
417,  422. 

Artoi«,  Chnrles,  Count  of,  his  opposition  to 
reform,  73. 

Auerstiidt,  87. 

Atkinson,  Edward,  298,  318,  410,  546. 

August'  a,  Emperor,  27. 

Australia  and  Ciilifornia,  effect  of  gold  dis- 
coveries in,  259,  204-209,  277-279. 

Austria,  advantage  of  Suez  Canal  to,  302; 
tinancial  crisis,  357,  359,  '363;  national 
wealth  of,  476  ;  business  failures  in,  503. 

Auvergne,  peasants  of,  oppose  reform,  80. 

Baltic  ports,  hampered  by  Sound  dues, 
180. 

Banks  of  England  and  of  France,  fluctua- 
tions in  rate  of  discount  of,  496-497. 

Basic  steel,  541. 

Baxter,  Dudley,  estimate  of  British  income 
by,  474. 

Beddoes,  Dr.,  assists  Davy,  52. 

Belgium,  417,  483,  485,  490,  500,  507. 

Bell,  Mr.,  inventions  of,  for  printing  cali- 
coes, 43-44. 

Belligerent  and  neutral  rights,  conflict  of, 
116. 


Berkeley,  Bishop,  449. 

Berlin  decree,  116. 

Berthullet,  M.,  his  experiments  in  bleach- 
ing, 43. 

Bessemer  steel,  312,  324,  438,  442,  448, 
539,  540. 

Blockade,  neutral  demands  respecting,  109. 

Bolton,  adopts  cotton  nianufucturo,  36; 
birthplace  of  Arkwright  and  Crouipton, 
213;  comparison  with  Lowell,  416. 

Boot  and  shoe  industry,  displacement  of 
labor  in,  by  machinery,  320. 

Boulton,  Mr.,  of  Soho,  his  connection  with 
Watt,  49. 

Bourse,  the,  64. 

Bradford,  dependent  on  the  wool  trade,  32. 

Brazil,  6,  14. 

Bread,  cost  of  manufacture  and  distribu- 
tion, .321. 

Bretagne,  5,  6,  82. 

Brienne,  ministry  of,  81. 

Bright,  John,  214. 

Britain,  see  Great  Britain. 


Caufoknia,  see  Australia  and  California. 

Calonne,  ministry  of,  75;  statement  of  mil- 
itary expenses,  78;  new  measures  by, 
80;  dismissed,  81. 

Canada,  French  colony  of,  long  under  the 
government  of  an  exclusive  company,  8. 

Canada,  Dominion  of,  its  growth,  1807- 
1890,  525. 

Canal,  Suez,  economic  effects  of  its  con- 
struction, 300-304. 

Carrying  trnde,  on  the  ocean,  revolution 
of,  305-309;  on  the  land,  revolution  of, 
.300-317. 

Champagne,  land  owners  in,  56. 

China,  308,  413,  415. 

Church,  revenue  of,  in  1875.  76. 

Clearing  houses  of  London  and  New  York, 
returns  of,  491. 

Coal,  difficulties  in  mining,  51 ;  industrial 
revolution  due  to,  54 ;  reduction  in  cou- 


632 


INDEX. 


ft 


n  I 


i' 


it 


ft 
if 


'^fi^\ 


■umptlon  of,  by  ocean  iit«amer»,  307; 
effect  of  machinery  on,  310;  iiao  of  an- 
thracite, 419;  increase  in  production  of, 
48&;  wages  in  mining  of,  4I)&;  produc- 
tion of,  in  Canada,  525;  possewiun  of, 
by  the  South,  530. 

Cobden,  Richard,  and  the  Anti-rorn-Law 
League,  214;  on  tlie  corn  lawo,  217,  232. 

Colbert,  manufactures  encouraged  by,  00, 
67. 

Colquhoun,  Mr.,  speech  of,  231. 

Collie,  Messrs,  failure  of,  350,  304. 

Colonies,  ancient  Urcelt  and  Homan,  3  ; 
Spanish,  4;  Portuguese,  6;  of  Holland, 
7;  of  Froncc,  8;  rapid  progress  of  Eng- 
lish, 0,  26;  exclusive  companies  injuri- 
ous to,  13;  tlie  trade  of  British,  how 
regulated,  14-20,  511-514;  the  different 
kinds  of  non-enumeruted  commodities 
specified,  15;  enumerated  commodities, 
17;  restraints  upon  their  manufactures, 
20;  favored  by  Britain,  22;  except  as 
to  foreign  trade,  24;  little  credit  due  to 
European  policy  for  success  of,  28; 
their  chief  indebtedness,  men,  30;  Eng- 
lish interference  with  trade  of  French, 
111-112. 

Commerce,  rostrnints  on  by  exclusive  com- 
panies, 13-14;  by  navigation  acts,  15, 
511 ;  French,  fettered  by  guilds,  65  ; 
effect  of  American  Non-intercourse  Act 
on,  121;  policy  of  France  towards,  under 
the  Restoration,  188;  of  Zollverein,  178- 
180, 189;  treaties  of,  198,  292-290;  effect 
of  Suez  Canal  on,  300-.3O4  ;  improved 
transportation  and,  307,  300,  489;  con- 
dition of  foreign,  an  economic  symptom, 
491 ;  of  Canada,  525. 

Commonable  Fields,  102. 

Contraband  of  war,  neutrals'  demand  re- 
specting, 109. 

Corn  laws,  object  of,  207  ;  of  1801,  207  ; 
of  1804,  209;  of  1816,  209;  of  1828,  213; 
new  law  of  1840,  231;  report  of  com- 
mittee on,  208;  injurious  effects  of,  211; 
formation  of  Anti-Corn-Law  league,  214 ; 
Mr.  Villiers  on  the,  215  ;  Sir  Robert 
Peel's  opinion  of,  219;  the  sliding  scale, 
220  ;  policy  of  Peel  towards,  230  ;  final 
measure  of  gradual  repeal,  231 ;  their 
relation  to  the  new  gold,  282. 

Corporation;,  restrictions  on  trade,  im- 
posed by,  65. 

Cotton,  early  manufacture  of,  34;  inven- 
tions which  have  developed  the  manu- 
facture of,  30-43;  the  factory  system 
illustrated  by  its  manufacture,  407 ; 
statistical  and  economical   comparison 


of  its  manufacture  in  Great  Britain  and 
the  United  States,  409-417;  the  extent 
of  its  production  an  economic  symptom, 
486. 

Cotton-gin,  invented  by  Eli  Whitney,  406. 

Crises  and  revivals,  periodicity  of,  355,  357, 
373,  483,  609-610.     Set  Depression. 

Crompton,  Samuel,  his  invention  of  the 
mule,  41. 


Dakota,  wheat  product  of,  330  ;  settle- 
ment of,  392,  303,  307. 

Davy,  Sir  H.,  his  early  career,  62  ;  invent! 
safety  lamp,  53. 

Decree,  Berlin,  Nov.  21,  1800,  116  ;  at 
Warsaw,  1807,  117  ;  Milan,  Dec.  17, 
1807,  118;  of  St.  Cloud,  Sept.  12,  1810, 
118  ;  of  Fontainebleau,  Oct.  10, 1810, 118. 

Deficit  of  1787,  80. 

Depression,  economic,  of  1873-1876,  355; 
universality  of,  350-358,  473  ;  a  caui<e, 
the  failure  of  foreign  investments,  368- 
364;  mildness  of  its  effects  in  the  United 
Kingdom,  304-308  ;  question  of  its  con- 
tinuance discussed,  309-373;  existence 
of.  from  1873  to  1879,  proven  by  statistics 
and  economic  symptoms,  469-510;  fol- 
lowed by  a  revival,  1870-1883,  similarly 
presented,  469-510;  and  renewed  depres- 
sion of  1883-1885,  473-510. 

Dettes  publiques,  cimp.  xv.;  augmentation 
des,  depuis  1870,  450-452 ;  dt'penses  de 
la  guerre,  de  la  marine,  capital  nominal 
et  intt'-rets  des  dettes,  453  ;  conversion 
de  rentes,  454  ;  abaissement  du  taux 
depuis  1870,  350;  modes  d'emission, 
361;  repartition  des  fonds  publics,  462; 
n(^gociation  des  rentes  fran^aises  aux 
sources  ^-trangeres,  303 ;  revolution 
(fconomique,  305. 

Discount,  rates  of,  in  1873,  356 ;  variations 
in,  an  economic  symptom,  496-497. 

Disturbances,  economic,  since  1873,  an  ex- 
planation of,  321-.322. 

Domingo,  St.,  French  colony  of,  9. 

Douanes,  legislation  affectant  les,  168 ;  les 
recettes  des,  du  zollverein,  202. 

Dudley,  Dud,  discovers  a  mode  of  smelt- 
ing iron  with  coal,  50. 

Dutch  settlements  in  America,  slow  im- 
provement of,  owing  to  government  of 
an  exclusive  company,  7. 

Duties,  modes  of  levying,  185-188. 


ftoHELLE  mobile,  154. 
Edict  of  Stein,  see  Stein. 


B  in  Great  Britain  and 
I,  4()U-417;  tlie  extent 
an  economic  «yinptuni, 

I  by  Eii  Whitney,  406. 
perioJii'ity  of,  385,  357, 

See  DcprcMion. 
,  his  invention  of  the 


oduct  of,  320  ;   lettle- 
397. 
irly  career,  52  ;  invents 

.V.  21,   1806,  110  i   at 

117  !    Milon,  Doc.  17, 

Cloud,  Sept.  12,  1810, 

lean,  Oct.  1»,  1810, 118. 

lie,  of  187.3-1870,  355; 
150-368,  473  ;  a  canoe, 
•ei^jn  investments,  368- 
its  effects  in  the  United 
;8  ;  (iiicstidii  of  its  con- 
Mi,  300-373;  existence 
J79,  proven  by  statistics 
inptoins,  409-510;  fol- 
il,  1870-188.),  similarly 
0 ;  and  renewed  dcpres- 
473-510. 

lap.  XV.;  augmentation 
450-452 ;  dt'penaes  de 
larine,  capital  nominal 
ttes,  463  ;  conversion 
ahaissement  du  taux 
modes  d'l-mission, 
ius  fonds  publics,  462 : 
rentes  fran9ai8es  aux 
es,     303 ;     Devolution 

n  1873,  356 ;  variations 

■mptom,  496-497. 

inic,  since  1873,  an  ex- 

322. 

h  colony  of,  9. 

affecta'nt  les,  108 ;  les 
lUverein,  202. 
vers  a  mode  of  smelt- 

50. 

n  America,  slow  im- 
ing  to  government  of 
lany,  7. 
ying,  185-188. 


4. 

tein. 


INDEX. 


688 


Edicts  of  Hardenberg,  fee  Hardenberg. 

Kgypt,  cuttun  of,  416. 

Electricity,  industrial  use  of,  326;  future 
effects  of,  509. 

Employment  of  labor,  changing  conditions 
of,  318-321,  323,  407;  advantages  of 
America  in  the,  417-428,  condition  of, 
an  cc(momic  syn)ptoni,  603-505. 

England,  llnancfH  of,  1793-1815,  chap,  vl.; 
a  new  oyNtcm  Introduced  by  Mr.  Fitt  in 
1797,  120;  new  impost  culled  the  triple 
assessment,  127;  income  tux  im|)osed 
and  repealed,  127-128;  explanation  of 
partial  prosperity  under  heavy  taxation, 
128-129;  inventions  rescued  England 
from  tinanciul  ruin  caused  by  French 
war,  129-131 ;  nmount  of  expenditure 
during  the  war  (I79'l-1815),  131 ;  quota- 
tions from  Sir  .lohn  Sinclair's  work  on 
the  Kevcuue  containing  forebodings  of 
financial  distress,  132-133;  amount  of 
public  debt  at  successive  peri'>ds  from 
1730  to  1810,  132-133,  130;  tabular  state- 
ment of  public  income  and  expenditure, 
1792-1849,  1.34;  amount  raised  on  loan, 
etc.,  135;  delusive  nature  of  the  sinking 
f\ind,  136-137,  142;  inconsistent  meas- 
ures adopted,  dead  weight  annuity,  con- 
version of  perpetuni  into  terminable 
annuities,  139-142;  balnnces  of  income 
and  expenditure,  1792-1850,  143-144; 
excess  of  expenditure  over  income  dur- 
ing the  period  of  war,  and  excess  of 
income  during  subsequent  peace,  144; 
310  years  of  peace  required  to  cancel 
debt  of  24  years  of  war,  144-146.  See 
Great  Britain. 

Europe,  colonial  policy  of,  1-28;  little  to 
boast  of,  28-29;  except  in  the  contribu- 
tion of  men,  .30;  the  army  in  her  revolu- 
tions, 83;  failure  of  rye  crop  in,  234; 
rise  of  prices  in,  due  to  new  gold,  255, 
257;  drain  oi  si'itcr  from,  to  tiie  East, 
275;  effect  of  Suez  Canal  on  the  com- 
merce of,  302;  financial  crises  in,  357; 
rapid  advance  in  her  cotton  manufactures, 
407 ;  advantages  of  America  for  compe- 
tition with,  417-427;  economic  changes 
in,  469-473,  508-510;  the  wealth  of,  474- 
477;  her  indebtedness,  450-468,  643- 
544. 


Famines,  prevention  of,  313. 

Feudal  system,  the,  describsd,  57-68;  over- 
throw of,  in  France,  84. 

Finances,  difficulties  of,  Louis  XVI.,  77-79; 
judicious  policy  of  Sir  Robert  Feel,  221- 


220.  Ste  England,  la  Rcstaurati<m,  la 
France  sous  le  second  empire,  French 
Indemnity. 

Flanders,  small  proprietors  in,  50,  02. 

Flour,  displacement  of  labor  in  the  manu- 
facture of,  320-321. 

Foville,  A.  de,  476,  403. 

France,  the  trade  of  her  colonies,  how  reg- 
ulated, 16;  tile  government  of  tlic  colo- 
nies conducted  with  moderation,  25;  the 
sugar  colonies  better  governed  than  tiiosu 
of  Britain,  26;  Huguenots  from,  settle 
in  England,  40;  rural  nobility  and  |ieas- 
unt  population  of,  65-03;  condition  of 
towns,  03;  of  trade,  65;  of  manufac- 
tures, 06;  decline  of  national  prosperity, 
08-70;  efforts  of  reform  under  Louis 
X  V'l.,  71 ;  resistance  uf  privileged  classes, 
72;  the  biulget,  75;  general  dissolution 
of  order,  82;  the  army,  83;  final  catas- 
trophe, 84;  permits  colonial  trade  to  neu- 
tral ships,  111-115;  restrictions  on  this 
trade  by  English  orders  in  council,  116, 
117;  blockade  of  her  ports  by  England 
118;  la  Hestauration,  148-li(9;  potato 
disease  appears  in,  234 ;  effects  of  new 
gold  in,  251;  sous  le  second  empire,  284- 
297;  payment  of  in<lomnity  by,  320-350; 
investments  of,  in  new  countries,  359;  in- 
crease of  her  public  debt,  451 ;  sells  I^u- 
isiana  to  the  United  States,  382 ;  national 
wealth  of,  475;  invested  capital  of,  500; 
business  failures  in,  503;  recent  tluctua- 
tions  of  trade,  488,  490,  492,  509. 

France,  la,  sous  le  second  empire,  chap.  xi. ; 
le  credit  foncieret  lecn'dit  mobiiicr,  284; 
ardeur  de  la  spt'-culution,  285;  la  crise  de 
1857  et  ses  suites,  280 ;  dt'veloppcment  du 
crc'dit,  287;  nouveau  sy8t<''me  do  conces- 
sion des  chemins  de  fer,  287;  les  grandes 
compagnies,  288;  multiplicatldns  des 
moyens  de  communicotion,  289;  progri's 
du  commerce  exterienr,  290-291 ;  le  st'na- 
tus  consulte  du  25  dt^c,  1852, 2i)2 ;  mesurcs 
relatives  h  la  disette,  292;  premiers  de- 
grO-vements,  293;  exposition  de  IS.W,  293; 
projet  de  supprimer  les  prohibitions,  294; 
lettre  du  5  Janvier,  1800;  le  traitede  com- 
merce avec  I'Angleterre,  295;  autres 
traiti's,  296. 

Frederic  the  Great,  93. 

Frederic  William  III.,  edict  of  emancipa- 
tion, 95. 

Free  ships,  free  goods,  neutral  demands  of, 
109. 

Freight  rates,  reduction  of,  307,  309. 

French  Indemnity,  payment  of,  a  vast 
transaction,  320;  conditions  under  which 


WWmWB 


634 


INDEX. 


i 


% 


payment  was  to  be  made,  329,  330  ;  gen- 
eral process  of  payment,  331-332  ;  parti- 
cular means  employed,  333-337  ;  bills 
how  obfainable  for,  338-340;  relation  of 
French  trade  to,  341 ;  movement  of 
precious  metals  an  element  in,  343-347  ; 
striking  facts  suggested  by,  348  ;  tri- 
umph over  obstacles  in,  349-350,  appli- 
cation of,  the  various  items  classitied, 
350-353. 

French  Kevulution,  the,  division  of  classes 
before,  55  ;  division  of  propert}',  56; 
feudal  system,  57,  01 ;  rural  nobility, 
5'?;  town  government,  t)4;  the  guilds, 
65 ;  restrictions  on  manufactures,  66  ; 
wealth  of  Frmice  at  the  period  of,  68  ; 
in  manufactures,  68  ;  in  agriculture,  69  ; 
.'n  commerce,  70  ;  schemes  of  reform, 
71-75;  the  budget,  75-70;  inequality  in 
distribution  of  taxes,  77;  expenses  of 
the  court,  78 ;  the  army,  83  ;  the  ancient 
polity  destroyed,  84. 

Frome  adopts  the  cotton  manufacture,  35. 

Gallatin,  Albert,  report  of,  406. 

Germany,  social  and  agrarian  changes  ef- 
fected  in,  bj'  Stein  and  Hardenberg,  86- 
108;  her  neutral  markets  glutted  during 
the  war  1793-1815,  110  ;  formation,  ob- 
jects, and  administration,  of  the  Zollver- 
ein,  170-206  ;  effect  of  the  new  gold 
upon,  255,  257,  201 ;  payment  of  indem- 
nity to,  bj'  France,  326-350  ;  application 
of  the  indemnity  by,  350-354;  financinl 
depression  in,  in  1873,  356,  357,  361  ; 
the  change  in  her  monetary  system,  368; 
increase  of  her  public  debt  since  1870, 
451;  American  advantages  in  manufac- 
ture over,  417-425;  national  wealth  of, 
475-476,  480;  recent  economic  progress, 
322,  483,  485,  488,  493-496,  500,  509; 
her  people  the  largost  element  m  recent 
American  innnigration,  506. 

Giddy,  Davies,  his  acquaintance  with 
Davy,  52. 

Giffen,  Robert,  economic  investigations  of, 
356,  474,  493,  501,  506,  548. 

Gladstone,  Mr.,  217. 

Gloucestershire,  dp])endent  on  the  woollen 
trade,  32;  Roman  iron  works  in,  50. 

Gold,  an  element  in  payment  of  French 
indemnity,  329,  333,  336,  343-346,  349; 
a  special  advance  of,  made  by  the  Bank 
of  France,  332,  334;  its  production  in 
British  Columbia  and  Nova  Scotia,  525. 
See  New  Gold. 

Grain,  variations  in  prices  of,  in  the 
17th  century,  315  ;   effect  of  improved 


transportation  on  prices  of,  314-317. 
See  Corn  Laws. 

Great  Britain,  progress  of  her  American 
colonies,  9-13 ;  the  trade  of  her  colonies, 
how  regulated,  14;  distinction  between 
enumerated  and  unenumerated  commodi- 
ties explained,  15;  restrains  manufac- 
tures in  America,  20;  privileges  granted 
to  her  colonies,  22;  constitutional  free- 
dom of  her  colony  government,  24;  t'le 
sugar  colonies  worse  governed  than  those 
of  France,  26;  increase  in  her  trade  dur- 
ing the  war,  1793-1815,  31;  introduction 
of  woollen  and  cotton  manufactures,  32- 
36;  encourages  manufacture  of  linen  in 
Ireland,  45  ;  lack  of  success  in  silk 
manufacture,  45-46  ;  her  great  inven- 
tions, 36-44,  47-53 ;  gave  her  wealth  and 
commercial  supremacy,  44,  53-54  ;  her 
laborers  contrasted  with  the  German, 
88;  trai^.i  of  neutrals  opposed,  during 
war  with  France,  109, 115 ;  orders  in  coun- 
cil, 116-118;  their  abolition,  120-124; 
the  war  of  1812,  124;  finances  of,  1793- 
1815,  126-147;  tariff  of  the  Zollverein 
hostile  to,  172;  the  Zollverein  participates 
in  the  advantages  of,  183-184;  imports  of 
the  Zollverein  from,  194  ;  the  Corn  Laws 
1801-1849,  207-241;  their  abolition,  231- 
233;  repeal  of  the  navigation  laws,  239- 
241;  advance  in  general  prices  due  to 
the  new  gold,  252-253 ;  a  corrective  in- 
flow of  silver  to  the  Fast,  256,  269,  276; 
her  use  of  credit,  252,  271-276  ;  com- 
mercial treaty  with  France,  23  Jan., 
1860,  295-296;  distribution  system  of, 
302  ;  tonnage  statistics  of,  305  ;  British 
wheat  market,  317  ;  growth  of  her  in- 
dustries, 323  ;  bills  on,  in  French  in- 
demnity, 335,  3.37  ;  liquidations  of,  1873- 
1876,  355-374;  statistical  and  economi- 
cal comparison  of  cotton  niarufuctures 
in  United  States  and,  409-417;  425-427  ; 
consumption  of  iron  and  steel  by,  435 ; 
increase  of  blast-furnaces,  440 ;  expense 
of  her  array  and  navy,  453  ;  growth  of 
her  national  wealth,  174  ;  cotton  indus- 
tries of,  485-486 ;  postal  statistics  of, 
490  ;  foreign  trade  of,  492  ;  prices  of 
staple  commodities  in,  493-494;  wages 
of  her  coal  miners,  495  ;  invested  capital 
of,  499  ;  business  fniUires  in,  502  ;  emi- 
gration from,  506;  iucrraso  in  nuirriagcs, 
507  ;  her  navigation  acts,  511-514. 

Greek  colonies,  3. 

Guienne,  system  of  metairie  in,  61  ;  pro- 
vincial assemblies  introdiired  into,  74. 

Guilds,   restrictions  imposed    by,  66-67  ; 


prices   of,    314-317. 

ress  of  her  American 
I  trade  of  her  colonies, 
;  distinction  between 
lenuinerated  cominodi- 
i;    restrains  manufac- 
20;  privileiijes  granted 
12;  constitutional  free- 
\'  government,  24;  the 
se  governed  than  those 
:rease  in  her  trade  dur- 
■1815,  31 ;  introduction 
tton  manufactures,  32- 
lanufacture  of  linen  in 
;k    of   success  in  silk 
-46  ;  her  great  inven- 
3 ;  gave  her  wealth  and 
•macy,  44,  53-54  ;    her 
jd  with    the  German, 
iitrals  opposed,  during 
109, 115 ;  orders  in  coun- 
;ir  ab'>lition,  120-124  ; 
124;  finances  of,  17U3- 
arift  of  the  Zollverein 
8  Zollverein  participates 
of,  18'{-184;  imports  of 
ni,  194  ;  the  Corn  Laws 
11;  their  abolition,  231- 
e  navigation  laws,  230- 
general  prices  due  to 
2-253;  a  corrective  in- 
he  East,  250,  269,  276; 
t,  252,  271-276  ;  com- 
ith    France,    23  Jan., 
listribution  system  of, 
,ti8tic8  of,  305  ;  British 
17  ;  growth  of  her  in- 
ills   on,  in  French  in- 
;  liquidations  of,  1873- 
tatistical  and  economi- 
if  cotton  niarufactures 
»nd,  409-417:  425-427  ; 
ron  and  steel  by,  435 ; 
furnaces,  440 ;  expense 
navy,  453  ;  growth  of 
1th,  ■.74  ;  cotton  indus- 
postal  statistics  of, 
de  of,  492  ;    prices  of 
es  in,  493-494;    wages 
495  ;  invested  capital 
failures  in,  502  ;  emi- 
incrtaso  in  marriages, 
ion  acts,  511-514. 

mt'tairie  in,  61  ;  pro- 
introdiiopd  into,  74. 
imposed    by,  65-67  ; 


INDEX. 


635 


hereditary  possession   salable,  63  ;  at- 
tempt to  abolish,  66. 


Hamilton,  Alexander,  Report  on  Manu- 
factures, 443,  549. 

Hanse  Towns,  117,  180,  194. 

Hardenberg,  agrarian  legislation  of,  in 
1811,  98  ;  consists  of  two  edicts,  99  ; 
rights  commuted  by  first  edict  of,  100; 
principles  of  indemnification,  101 ;  rules 
for  guidance  in  the  application  oi  these 
principles,  102;  agricultural  reforms  of 
the  second  edict,  103-104  ;  restrictions 
in  edict  of  1807  removed,  104;  important 
passage  quoted  from,  104-106  ;  various 
measures  in,  100-108. 

Hargreaves,  John,  his  invention  of  the 
spinning-jenny,  38,  129. 

Henry  III.,  restri-tions  on  trade  imposed 
by,  65. 

History,  place  in,  of  period  from  1860  to 
1885,  298 ;  summary  of  recent  economic, 
322-325,  469-473,  508-510. 

Holland,  114,  118, 119,  180,  194,  483,  497, 
507. 

Hours  of  labor,  reduction  in,  503-505. 

Human  race,  the,  increased  power  of, 
through  railroad  agencies,  310  ;  com- 
mercial relations  establish  the  unity  of, 
471-472. 

Immigration,  American,  28-30,  238,  395, 
505-507,  520. 

Imports,  increase  of,  in  England,  1793- 
1815,  31  ;  restrictive  duties  on,  in  Eng- 
land, 40,  207-212;  in  France,  07,  148- 
169  ;  in  Germany,  185-191  :  effects  of 
decrees  and  orders  in  counci),  114,  116- 
121;  oscil'.vtiuns  in  receipts  of,  in  Gi;r- 
many,  ]8'i4-1859,  202;  rcmov;xl  of  duties 
on,  in  England,  211-233;  reduction  of 
duties  on,  in  France,  294-297  ;  varia- 
tiohs  in,  an  economic  symptom,  487, 
491-492;  amount  of,  in  Canada,  525. 

Income  and  propcrtj-  tax,  introduction  of, 
by  Sir  Robert  Peel,  in  1843,  224;  ex- 
empted, in  England,  184.5,  1875,  475; 
value  of  property  assessed  for,  in  Eng- 
land, 224,  474  ;  in  France,  475  ;  in  Ger- 
many, 470  ;  in  United  States,  478. 

Indemnity,  see  French  Indemnity. 

India,  cotton  manufacture  an  ancient  in- 
dustry in,  H4  :  offpcts  of  new  gold 
upon,  252-258,  208-209  :  due  rliiefiy  to 
her  absorption  of  silver,  272-270;  reduc- 
tion in  length  of  voyage  to  and  from, 
by  Suez  Canal,  300-300. 


Industries,  tee  Cotton,  Iron  and  Steel,  In- 
ventions, Worlds'  Economic  Progress. 

Interest,  rates  of,  135,  453,  496-497. 

International  relations,  increase  and  im- 
portance of,  469-473. 

Inventions,  John  Kay's  fly-shuttle,  36; 
Robert  Ivay's  drop-box,  37;  John  Har- 
greave's  spinning-jenny,  38;  Richard 
Arkwriglit's  water-frame,  39  ;  Lewis 
Paul's  revolving  cylinders,  40;  Samuel 
Crompton's  mule,  41  ;  Edmund  Cart- 
wright's  power-loom,  43;  James  Watt's 
steam-engine,  49;  Dud  Dudley's  smelt- 
ing process,  50  ;  Humphrey  Davy's 
safety-lamp,  53  ;  Eli  Whitney's  cotton- 
gin,  405  ;  recent,  enumerated,  324-325; 
general  effects  of,  53-54,  131,  322-324, 
509-510. 

Ireland,  manufacture  of  linen  in,  45  ;  dis- 
tress in,  233-236  ;  emigration  from, 
237-238. 

Iron,  its  early  use  in  Britain,  50  ;  the  im- 
petus given  by  Duilley's  smelting  pro- 
cess, 51;  effect  of  duties  on,  during  the 
Restoration,  100  ;  exports  of,  from  Zoll- 
verein, 200-201 ;  world's  production  in 
1880,  445;  iron-ore  in  the  United  States, 
529-534. 

Iron,  pig,  increase  in  world's  product  ■  •  '0- 
1883,  317;  in  England,  484;  in  the 
United  States,  1880-1890,  535-538. 

Iron  and  steel,  effect  of  cheapening  on 
railroad  construction,  318 ;  important 
uses  of,  435-447;  steel  production  in 
the  United  States,  538-542. 

Italy,  34,  303,  431,  483,  488,  490,  544. 


Kay,  John,  his  invention  of  the  fly 
shuttle,  30. 

Kay,  Robert,  his  invention  of  the  drop- 
box,  37. 

Kendal,  dependent  on  the  woollen  indus- 
try, 32. 


LAnoR,  liberally  rewarded  in  the  colonics, 
1,  9  ;  restrictions  upon,  by  the  guilds, 
65-08  ;  rights  commuted  by  the  edict  of 
Ilardenberg,  100  ;  demand  for,  can  only 
inereiise  with  increase  of  capital,  130- 
131  ;  decrease  of,  in  the  management  of 
vessels,  ^0!'>  ;  displacement  of,  by  ma- 
chinery, 318  ;  in  cotton  mills  of  the 
United  States,  318,  415  ;  advuntuges 
possessed  In  America,  417-427  ;  <st  of, 
reduced  by  nnidihiery,  428  ;  strikes  a 
symptom  of  its  condition,  504-506;  cost 


ft' 


686 


INDEX. 


m. 


%* 


of,  in  United  States  iron-ore  mining, 
534. 

Laborers,  tenure  of,  in  Britisli  American 
colonies,  10;  effects  of  the  feudal  system 
upon,  57-08  ;  abolition  of  "  caste  in 
persons,"  by  Stein,  92,  94;  character  of 
German,  184  ;  of  British,  370-371 ;  of 
American,  41G-421 ;  variations  in  the 
condition  of,  an  economic  sj-mptom, 
503-504  ;  number  of,  employed  in  the 
United  States  irou-ore  mining  industry, 
533. 

Lafayette,  Marquis  of,  his  American  ex- 
pedition, 73-74. 

Land,  quantity  of,  an  element  in  coloniza- 
tion, 3,  4,  9,  10;  classilication  of,  before 
and  after  the  lie  volution,  50-57;  "caste 
in  land"  abolished  by  Stein,  92,94,90; 
agrarian  legislation  of  Hardenberg,  98- 
107  ;  failure  of  crops,  1845-1840,  234- 
238;  effects  of  improved  transportation 
and  production,  212,  320-321 ;  westward 
progress  of  American  settlement,  375- 
399. 

Latin  Monetary  Union,  290. 

Lead,  Komaus  obtained  from  Wales,  50. 

Leva^KCur,  E.,  writings  of,  251,  555. 

Licenses,  commercial,  number  of,  1802- 
1811,  (note)  120  ;  evils  of,  during  the 
blockade,  120-122. 

Linen  trade,  the,  its  history,  45. 

Loans,  amount  of  money  raised  by,  in 
England  (1801-1821),  135;  two  distinct 
methods  of  obtaining,  130-141  ;  extent 
of,  by  the  Dank  of  France  under  the 
Second  Empire,  285-287  ;  their  employ- 
ment of,  for  payment  of  French  indem- 
nity, .331-332,  338-341  ;  conversion  of, 
454-459 ;  investments  in  public,  an 
economic  symptom,  498-500. 

London,  its  money  market  a  great  distribu- 
tor, 253  ;  and  equalizer,  358. 

Louis  Xyi.,  character  of,  71  ;  abortive 
reforms  by,  72. 

Lowel',  Francis  C,  establishes  first  com- 
plete cotton  factory  at  Waltham,  407. 


Macclk8fiei,i>,  transfer  of  silk  trade  from 
Spitalfields  to,  4(i. 

Machinery,  improvements  in  cotton,  30- 
44  :  the  steam  engine,  49-50  ;  enact- 
ments against,  prior  to  French  Revolu- 
tion, (iO;  displacement  of  labor  by,  318- 
319,  415  ;  epiK-h  of  efiicient,  321-325  ; 
Jaws  against  exportation  of,  by  England, 
404;  cotton,  introduced  into  America  by 
Samuel  Slater,  403-404;  Eli  Whitney's 


cotton  gin  as  important  as  inventions  of 
English  cotton  manufacturing,  405 ;  Mr. 
Lowell  sets  up  improved  cotton,  403- 
407  ;  stoppage  of,  during  American  civil 
war,  414  ;  British  operatives,  370-372 ; 
American  operatives,  417-425  ;  cost  of 
labor,  reduced  by,  428  ;  advantages  of, 
430-4.34;  important  iron  products  due 
to,  435-440  ;  recent  advancement  in  iron 
and  steel,  441-449,  530-537,  539-542. 

Maltzahn,  Baron,  report  of,  to  Mr.  Can. 
ning,  185. 

Manchester,  its  early  prosperitj'  dependent 
on  wool,  32;  adopts  cotton  industry,  35. 

Mankind,  tee  Human  Race. 

Manufactures,  British  restraints  on,  in 
North  America,  20 ;  fostered  by  Colbert, 
00-07;  the  protective  policy  of  the  Resto- 
ration, 148-109 ;  beneticial  effects  of  Sir 
Robert  Peel's  policy,  224-220 ;  establish- 
ment of,  by  the  Zollverein,  172,  181  ; 
growth  of  the  factory  system,  400-409. 

Meats,  cost  of  ocean  transport,  308. 

Merchants,  the  government  of  a  company 
of,  the  worst  possible  for  a  country,  7. 

Metals,  precious,  the  movement  of,  p:i  ele- 
ment in  the  payment  of  Frenc'  indem- 
nity, 343-347.    See  New  Gold. 

Mexico,  390. 

Milan  decree,  118. 

Mining,  coal,  51-53;  iron-ore,  529-534. 

Money,  effects  of  an  increased  supply  of, 
244-251,  250-257;  effects  of  a  credit  sys- 
tem, 251-252;  kinds  of,  used  in  pay- 
ment of  French  indemnity,  330,  333- 
338,  340;  investments  in  credit  ins'itu- 
tions,  498;  Canadian  savings,  525. 

Monopolies,  injurious  effects  of  colonial, 
7-8,  15-22;  the  guilds,  05-00;  the  ex- 
ample of  England,  232. 


Nantes,  edict  of,  the  revocation  of,  40. 
Napoleoi'  I.,  Berlin  decree  of,  110;  Milan 

decree  of,  118;  decree  of  St.  Cloud  and 

of  Fontainebleau,  118. 
Nations,  increasing  relations  of,  409-473. 
Navigation  Acts,  English,  enumerated  and 

unenumerated   commodities  of,   15-22 ; 

repeal    of,    2-'5r)-241  ;    leading    sections 

from  the,  511-514:  American,  important 

sections  of,  515-510. 
Necker,  appointed  minister,  74;  dismissed, 

75 ;  restored  to  office,  81. 
Neutrals,   historical   sketcli   of   England's 

policy    towards,    110-112;    evasion    of 

bellij'ercnt  rights  by,  113-115  ;  orders 

in  council  against,  110,  117,  118. 


'tant  as  inventions  of 
lutacturing,  405 ;  Mr. 
iiproved  cotton,  400- 
iuring  American  civil 

operatives,  370-372; 
es,  417-425  ;  cost  of 

428  ;  advantages  of, 
It  iron  products  due 
I  advancemeut  in  iron 
530-537,  53<J-542. 
port  of,  to  Mr.  Can. 

prosperity  dependent 
s  cotton  industry,  35. 
Race. 

ill    restraints   on,    in 
;  fostered  by  Colbert, 
ve  policy  of  the  Hesto- 
nclicial  effects  of  Sir 
y,  224-220;  establish- 
Zollverein,  172,  181  ; 
ry  system,  400-409. 
transport,  308. 
nnient  of  a  company 
lie  for  a  country,  7. 
mnvpmtnt  of,  i':i  ele- 
ent  of  Frcnc'  ludem- 
!  New  Gold. 


iron-ore,  529-534. 
increased  supply  of, 
jffecfs  of  a  credit  sys- 
ds  of,  used  in  pay- 
demnity,  330,  333- 
nts  in  credit  ins'it'.i- 
n  savinj^s,  525. 

effects  of  colonial, 
ilds,  G5-66;  the  ex- 
1232. 


revocation  of,  40. 
ecree  of,  110;  Milan 
ee  of  St.  Cloud  and 
8. 

ations  of,  469-473. 
lisli,  enumerated  and 
niodities  of,   15-22 ; 
len<ling    sections 
\merican,  important 

isfer,  74 ;  dismissed, 

81. 

ketcli  of  Eiiu'land's 
ii-l]-_'  ;  evasion  of 
v,  113-115  ;  orders 
10,  117,  118. 


INDEX. 


637 


Neutrality  armed,  principles  of,  109-110; 
advantages,  113-115. 

Newcomen,  the  inventor  of  a  steam  engine, 
48;  its  defects,  48-49. 

New  England,  the  colonial  law  of  inherit- 
ance, 10 ;  importance  of  its  fishery,  16  ; 
freedom  of  its  government,  25;  changes 
in  the  factory  population,  421  ;  advan- 
tages of,  for  manufactures,  417-434 ; 
recent  decrease  in  her  iron  manufactures, 
635. 

Newfoundland,  308. 

New  Gold,  the,  chap,  x;  a  fall  in  value  of 
money  and  a  rise  of  general  prices, 
caused  by,  242-243  ;  the  rise  of  ))rice3 
unequal  during  period  of  augmentation, 
244;  two-fold  process  by  which  the  in- 
creased production  operates,  245-247  ; 
the  laws  which  govern  the  rise  of  prices, 
247-251 ;  the  influence  of  different  cur- 
rencies upon  the  course  of  the  movement, 
251-257;  a  change  in  the  distribution 
rather  than  an  increase  in  the  amount 
of  wealth  from,  259  ;  a  loss  to  com- 
mercial nations  produced  by,  200 ;  the 
order  and  effects  of  the  movement  upon 
different  nations,  200-275 ;  influences 
developed  by  the  movement  that  com- 
pensate for  the  loss,  275-278  ;  the  un- 
equal rise  of  prices  in  particular  countries 
during  the  movement,  278-281. 

Norwich,  the  original  scat  of  the  woollen 
trade,  32. 

Ocean  freights,  reduction  of,  due  to 
economy  in  consumption  of  coal  by  com- 
pound engines,  307-308. 

Operatives,  the  character  of  German,  184; 
of  English,  370-372;  of  Amcricun,  417- 
425;  average  product  of,  at  different  pe- 
riods, in  cotton  mills  of  the  United  States, 
318,  41.5. 

Orders  in  council,  of  May  16, 1800.  110;  of 
Jan.  7, 1807,  117;  of  Nov.  11,  1807,  117; 
of  April  20,  1809,  118;  Lord  Brougham 
on,  122-124;  declaration  by  the  I'rince 
Regent  to  revoke,  124  ;  but  too  late  to 
prevent  the  war  of  1812,  124. 

Panics,  see  Crises. 

I'aris,  trade  of,  in  the  18th  century,  04; 
its  ni.b  armed  against  the  ministry,  80; 
parliament  ot',  demands  an  Assembly  of 
the  States  General,  81 ;  tre.ity  of.  not  the 
cause  of  American  industrial  indepen- 
dence, 401;  number  of  new  companies 
established  in,  1881-1881,  500. 


Peasantry,  French,  condition  of,  prior  to 
the  Revolution,  57-63;  their  emancipa- 
tion, 82-85;  German,  condition  of,  prior 
to  the  emancipating  edict  of  Stein,  87- 
88  ;  the  abolition  of  caste  in  persons  and 
serfdom,  92-90. 

Peel,  Sir  Robert,  adnunistration  of,  217; 
his  policy  in  regard  to  the  forn  laws, 
219-221;' financial  policy  of,  221-225; 
commercial  policy  of,  225-229  ;  repeal 
of  the  corn  laws  by,  230-233. 

Petty,  Lord  Henry,  new  financial  depar- 
ture by,  145-146. 

Picardy,  small  landed  proprietors  of,  02. 

Population,  movement  of,  an  economic 
symptom,  507-508.  Ute  Immigration, 
United  States  Census. 

Portugal,  colonies  of,  5;  in  16th  century  a 
great  naval  power,  6 ;  her  colonial 
government,  25. 

Postal  statistics,  economic  significance  of, 
490-491. 

Potato,  Ireland  and  the,  233-238. 

Prices,  low,  of  land  in  the  colonies,  7  ; 
colonial,  of  European  'goods,  15  ;  com- 
parison of,  of  bread  befnre  and  sii;ce 
1789,  69;  of  bread,  in  England  during 
the  war  (1793-1815),  130  ;  the  sliding 
scale  regulated  by,  of  wheat,  213,  219- 
222;  increase  in,  of  grain  owing  to  fail- 
ure of  the  potato  crop,  230 ;  effect  of  the 
new  gold  on  general,  242-283;  effect  of 
railroads  and  steamships  on,  314-315; 
of  cotton,  in  relation  to  the  American 
civil  war,  414  ;  their  economic  signi- 
ficance, 492-4!t4. 

Production,  in  European  colonies,  1-30 ; 
an  increase  of,  owing  to  the  groat  inven- 
tions, 31.51,  53-')4  ;  low  state  of,  in 
France  i)rior  to  the  Kevolntion,  55-08  ; 
hindered  in  Prussia  l\v  the  caste  svstem, 
94;  effects  of  the  protective  system  upon, 
of  iron  during  the  Restoration,  10(1  ; 
improved  conditions  of,  in  tiie  Zoliverein, 
181-185;  the  lessened  cost  and  increased 
amount  of.  owing  to  recent  improve- 
ments, 317-320;  comparison  of  cotton, 
in  1800  ami  18SU.  41.");  the  world's,  of  iron 
and  steel  in  1^80,  445;  the  economic 
signitieancc  of  variations  in  tlie  world's, 
1870-1385,  481-480;  of  coal  and  gold 
in  Canada,  52");  of  iron  ami  steel  in  the 
United  States,  IHSO-lHitO,  52'.t-542. 

Production  and  distribution,  average  sav- 
ing in  time  ami  labor  of,  in  recent  years, 
298;  new  cnndit'ons  of,  298-325. 

Prussia,  ste  Germany,  Stein,  llnrdenberg, 
Zoliverein. 


638 


INDEX. 


k 


P 
If. 


Purchasing  power,  in  France,  69;  in  Eng- 
land, 130 ;  in  America,  416. 

Quito,  4. 

Railroad  construction,  recent  reduction 
in  tlie  cost  of,  312,  318  ;  extent  of,  an 
economic  symptom,  489-490;  extensive 
use  of  Bessemer  steel  in  American,  539- 
540. 

Railways,  introduction  of,  in  Germany, 
183  ;  extension  of,  in  France,  287-289  ; 
average  freight  cliarges  of  American, 
309-310;  economic  effects  of,  311-315; 
German  accjuisition  of,  in  Alsace-Lor- 
raine, 330-331;  investments  bj'  Germany 
of  French  indemnity  in,  351 ;  speculation 
in,  by  new  countries,  360;  comparative 
mileage  in  1881  of,  in  the  United  States 
and  other  countries,  435  ;  the  world's 
mileage,  in  1889,  310;  increase  in  Cana- 
dian mileage,  18G8-1890,  525. 

Reciprocity  of  foreign  countries,  speech  of 
Sir  Robert  Peel  on,  227-229;  benefits  of, 
469-473. 

Restauration,  la,  politique  commerciale  de, 
chap.  vii. ;  de  I'esprlt  dos  lois  douani- 
^res,  148;  ordonnance  du  23  avril,  1814, 
149  ;  radministration  et  la  Chambre, 
149;  reclamations  centre  I'ordonnance, 
150;  droits  sur  les  fers,  150  ;  loi  du  17 
d^cembre,  1814, 151;  rapport  de  Magnie- 
Grandprez,  152;  loi  du  28  avril,  18i6, 
152;  loi  du  27  mars,  1817, 153;  le  transit 
d' Alsace  rotabli,  154;  protestations  des 
ports  de  mer,  154  ;  loi  de  1819  sur 
IV-chelle  mobile,  154  ;  loi  de  1821,  155  ; 
Bes  cons«''quences,  150;  r(?claniations  pro- 
tectionistes,  156  ;  loi  de  1820,  157  ;  loi 
du  27  juillft,  1822,  157;  rapport  de 
Bourienne,  158  ;  les  sucres,  159  ;  les 
bestiaux,  ICO;  les  fers,  160;  premieres 
reclamations  des  manufucturiers  contre 
le  systtMue,  160;  pretentions  de  ladroite, 
161;  profession  do  foi  du  Baron  Saint- 
Cricq,  161;  loi  du  17  mai,  1826,  163; 
attitude  du  gouvernemcnt,  183:  difficultes 
du  syst^rae,  164;  traitds  de  commerce, 
165  ;  les  iHudes  economiqiies,  105;  J.  B. 
Say  et  la  thOorie  des  di'boufiies,  165; 
projet  de  loi  modon''  du  niiuistere  Mar- 
tignac,  167;  caractere  du  systeme  pro- 
tecteur,  168;  de  la  faveur  doiit  11  jimis- 
8ait  en  Europe,  169. 

Revenue,  public,  and  oxpemliturc,  before 
the  Revolution,  in  Kriuice.  75-Si);  from 
1792  to  1840  in  England,  LU,  143-144  : 
1861-1884  in  the   United  States,   520- 


624;  1868-1890  in  Canada,  525;  muni- 
cipal, in  the  United  States,  642. 

Revolution,  economic,  due  to  inventions, 
31,  53-54,  298,  324-325,  405,  415,  509; 
social  and  political,  «ee  French  Revo- 
lution, Stein. 

Roebuck,  Dr.,  associated  with  James  Watt, 
49. 

Romans,  the  advance  of  the  Roman  slower 
than  of  the  Greek  colonies,  3. 

Rule,  of  1756,  meaning  of.  111 ;  relaxation 
of,  112;  of  1798,  neutral  complaints  of, 
112. 

Russell,  Lord  John,  advocates  a  fixed 
duty,  221 ;  fails  to  form  a  cabinet,  231. 

Russia,  reprisals  against,  110;  prohibitory 
tariff  of,  193  ;  grain  harvest  of,  1888, 
316 ;  increase  in  public  debt  since  1870, 
451 ;  restrictions  upon  its  goods  in  the 
English  Navigation  Acts,  512. 


Sailino-vessels,  decrease  in  number  and 

total  tonnage  of,  300,  308. 
Savings  banks  of  Canada,  525. 
Say,  M.  L^on,  Report  of,  discussed,  326- 

350. 
Scheele,  discovers  the  bleaching  properties 

of  oxymuriatic  acid,  43. 
Schon,  Theodor  v.,   his   opinion   of   the 

edict  of  emancipation,  87,  95. 
Seal  fishery  of  Newfoundland,  changes  in, 

308. 
Search,  right  of,  neutral  demands,  109. 
Securities,  government,  investments  in,  an 

economic  symptom,  498-499. 
Serfdom,  abolition  of,  in  France,  84 ;   in 

Germany,  94. 
Shipping,  increased  efficiency  of,  300-309; 

encouragement  to  American,  519 ;  amount 

of  Canadian,  525. 
Sien-ens-Martin  furnace,  446. 
Sillv  trade,  the,  established  in  England  by 

tiie  Huguenots,  46. 
Silver,  the  drain  of,  to  the  East,  275-276. 
Sinclair,    Sir  John,   quotations    from   his 

work  on  the  public  revenue,  132-133. 
Slater,  Samui'l,  erects  '■•^t  cotton  factory 

with  machinerj-  after  linglish  nioiii'ls  lu 

America,  403. 
Socialism,  recent  phases  of.  505. 
Soctbeer,  Dr.,  statistics  of,  476. 
Sonthern  States,  the,  estimated  loss  to,  by 

the  civil  war,  521;  the  rate  of  increase 

of  their  population  an  important  factor  in 

the  census,  527-528  ;  recent  development 

of  the  blast-furnace  industry  in,  WiW. 
Spain,  the  colonies  of,  4;  her  assertion  of 


0  in  Canada,  525;  muni- 
nited  States,  542. 
lomic,  due  to  inventions, 
,  324-325,  405,  415,  509; 
itical,  see  French  Revo- 

jociated  with  James  Watt, 

ance  of  the  Roman  slower 
!ek  colonies,  3. 
aning  of,  111 ;  relaxation 
•8,  neutral  complaints  of, 

ohn,  advocates  a  fixed 
s  to  form  a  cabinet,  231. 
against,  110;  prohibitory 
grain  harvest  of,  1888, 
n  public  debt  since  1870, 
IS  upon  its  goods  in  the 
ition  Acts,  512. 


I,  decrease  in  number  and 

',  300,  308. 

Canada,  525. 

eport  of,  discussed,  326- 

the  bleaching  properties 
acid,  43. 

v.,   his   opinion   of  the 
jation,  87,  05. 
iwfoundland,  changes  in, 


INDEX. 


639 


eutral  demands,  109. 
iient,  investments  in,  an 
Dm,  498-499. 
of,  in  France,  84 ;   in 

efficiency  of,  300-309; 
American,  519 ;  amount 

mace,  446. 

iblished  in  England  by 

to  the  East,  275-276. 
quotations    from  his 
ic  revenue,  132-133. 
■Its  -i^t  cotton  factory 
iter  English  niodvls  la 

lases  of,  505. 

tics  of,  476. 
estimated  loss  to,  by 
;  the  rate  of  increase 
an  important  factor  in 

f< ;  recent  development 

e  industry  in,  T);)!). 

of,  4;  her  assertion  of 


an  exclusive  claim  to  all  America,  6; 
policy  of  her  trade  with  the  colonies, 
14;  cotton  introduced  by  the  Moors  into, 
34;  reprisals  against,  in  1805,  110  ;  aug- 
mentation of  debt  since  1870,451;  con- 
version of  its  loan  to  Cuba,  406. 

Speculation,  see  Crises. 

Spices,  513. 

Spindles,  John  llargreaves  the  first  to 
make  use  of  a  number  of,  38;  total  num- 
ber of,  operated  in  1880,  in  the  cotton 
manufacture  of  the  United  States,  414. 

States-General,  demanded,  80;  meeting  of, 
fixed,  81. 

Steam  engine,  invention  of,  48-50;  effects 
of,  upon  the  productive  energies  of  Great 
Britain,  12i)-131  ;  economic  value  of 
recent  impro'-cments  in,  307. 

Steamers,  ocean,  displace  sailing  vessels, 
300-308 ;  their  increased  efficiencv,  305- 
308. 

Steel,  Bessemer,  value  of  discovery  of, 
312;  substitution  of,  in  place  of  iron, 
312-313;  prompt  introilrction  of,  rails 
in  America,  442:  the  United  Slates  in 
advance  of  other  nations  in  the  use  of 
(1880),  447,  448;  remarkable  increase  in 
its  use  from  1880  to  18U0  in  the  United 
States,  539,    <Sce  Iron  and  Steel. 

Stein,  the  emancipating  edict  of,  decreed 
in  1807,  80;  his  own  account  of  the  edict, 
36;  Schiin's  view  of,  87;  its  threefold 
character,  88;  modern  peasant  proprie- 
torship not  included  in,  8U;  a  description 
of,  in  detail,  90-95;  text  of,  95-97. 

Stock,  amount  and  description  of,  created 
in  England  from  1801  to  1821,  i;J5;  com- 
parison of  methods  of  funding  debt  in, 
in  3  and  in  5  per  cent  annuities,  1:J7-139. 

Strikes,  economic  signilicance  of,  504-505. 

Suez  Canal,  economic  effect  of  its  construc- 
tion, 300-304. 

Sugar,  originally  an  "enumerated"  com- 
modity, 16  ;  manufacture  of  reiined, 
discouraged  in  British  colonies,  20,  26; 
increased  consumption  of,  in  1880  in  the 
United  States,  487. 

Suicides,  variations  in  the  number  of,  an 
e.onoinic  symptom,  508. 

Tahikf,  protective,  levied  during  the 
Kestoration,  148-160;  nature  of,  in  the 
Zollver.in,  135-103  ;  prohibitory,  in 
Russia,  Poland,  and  Austria,  103;  adop- 
tion of  free  trade  by  England,  207-233. 
Stre  Imports. 

Taxation,  under  Louis  XVI.,  76:  indirect, 
formerly  preferred  to  direct,  by  British 


governments,  127 ;  a  common  system  of, 
introduced  by  the  Zollverein,  178;  valu- 
ation of  property  for,  in  the  United 
States,  478. 
Tea,  increased  importation  of,  in  18S0  in 
the  United  States  and  France,  487,  488. 
Telegraph,  extent  of  the  electric  system, 
289-290,  310  ;  influence  of,  on  the  con- 
ditions of  commerce,  302,  471 ;  statistics 
of  its  use,  a  symptom  of  economic  pro- 
gress, 490-491.' 
Textile  manufactures,  early  history  of,  in 
England,  32-38 ;  importance  of  the  great 
inventions  to,  38-49,  53-54 ;  restrictions 
upon,  p.'ior  to  1789,  in  France,  00-67; 
progress  of,  in  Germany,  184-185;  de- 
velopment of  the  factory  system  in  tlie 
United  States,  400-408;  nature  and  ex- 
tent of  American  cotton  manufactures, 
409-416  ;  advantages  of  the  United 
States  for  competition  in,  417-434; 
strikes  of  workmen  in,  505. 
Tilsit,  peace  of,  94. 

Tin,  obtained  by  the  Romans  from  Corn- 
wall, 50. 
Tobacco,   an   "  enumerated  "  commodity, 
18;  low  duty  upon  colonial,  22;  impor- 
tation of,  in  United  States,  France,  and 
Germany,  487,  488. 
Tolosan,  on  the  wealth  of  France,  68. 
Tonnage,  statistics  of  British,  305;  of  the 

world's,  308,  490;  of  Canadian,  525. 
Towns,  magistracy  of,  before  the  Revolu- 
tion, 63-64;  municipal  receipts  and  ex- 
penditures of  100  cities  in  the  United 
States,  542. 
Trade,  restrictions  upon  colonial,  13-24; 
increase  of,  in  England.  1793-1815,  31; 
extent  of,  in  France,  before  and  /  fterthe 
Revolution,  70-71 ;  effect  of  orders  in 
council  upon,  119;  development  of  in- 
ternal, of  the  Zollverein,  178-179;  its 
policy  towards  external,  187-19.J:  eman- 
cipation of  Englisli,  207-2.'{3;  influence 
of  the  new  gold  upon,  250-251,  2.in,  270- 
271,  279-280;  progress  of,  in  France, 
2!)1;  chanfrcs  in,  through  the  opening  of 
the  Suez  Canal,  300-304;  effect  of  im- 
proved transportation  on,  30.^-317  ;  of 
improved  production,  317-321  ■  charac- 
teristics of  the  deiii-ession  in,  1873-1876, 
309;  comparison  of  English  and  United 
States  cotton,  409;  illu-trntion  of  Ameri- 
can advantage  for  competition  in  for- 
eign, 425-428  :  statistics  of  Canadian, 
525.  Set  World's  Economic  Progress. 
Transportation,  early  conditions  of,  in 
France,  60;  improved  facilities  of,  in  the 


640 


INDEX. 


•5 


%^ 


Zollverein,  178-179,  183-184;  multipli- 
cation of  means  of,  in  France,  284,  287- 
28!) ;  iiitiueiice  of  Suez  Canul  on,  3U0- 
304 ;  revolution  in  the  carryinf?  trade  on 
the  ocean,  305-300;  on  the  land,  309- 
312;  effects  of  improved,  312-317;  eco- 
nomic si(;niflcance  of,  480-400. 

Treaty,  of  Amiens,  110,  13G;  at  Vienna, 
124;  between  United  Stales  and  Great 
Britain,  in  1815, 125;  Anglo-rrencii  com- 
mercial, of  18iiO,  205-201! ;  three  Franco- 
German  treaties  or  conventions  of  1871, 
329. 

Treaties  of  commerce,  of  the  Zollverein, 
108-201;  of  France,  under  the  Second 
Empire,  292-207 ;  series  of  international, 
470. 

Trianon,  tariff  of,  118. 

Turgof,  on  subdivision  of  land,  56;  guilds 
abolished  by,  G5;  conmiercial  legislation, 
67;  measures  of  reform,  72;  dismissed, 
73. 


United  Kingdom,  see  Great  Britain. 

United  States,  the  colonial  progress,  9-25 ; 
advantages  from  neutral  position  of,  in 
the  French  and  English  war,  113-114; 
non-intercourse  act  by,  121;  the  war  of 
1812,  122-124;  peace  concluded,  125; 
tradi'  with  the  Zollverein,  187;  relief 
^cnt  III  Ireland,  235;  Irish  enii.:ration  to, 
23()-2:i8 ;  effects  of  new  gold  in,  252,  254- 
2.57,  275-276;  influence  of  the  Suez  Canal 
on,  302;  reduction  on  ocean  freight  lo 
foreign  countries,  308  ;  railroad  freight 
transportation  of,  310:  transfer  of  its 
western  wheat  crop,  317;  displacement 
of  muscular  Inlxir  in  the  cotton  mills  of, 
318;  crisis  of  1873  in,  356,  359;  railway 
speculation  in,  300;  decline  of  English 
exports  to,  302;  low  prices  in,  363;  in- 
creased capacity  for  production  and 
manufacture  of  iron,  370,  372  ;  early 
introduction  of  textile  machinery  in, 
400-405;  growth  of  the  factory  system, 
40  1-408:  statistical  comparison  of  cotton 
niniiufiu'tur^  of  Griat  Bmain  and,  409; 
character  of  tlie  cotton  rabrics  in  Eng- 
land and,  41< -413;  advantages  in  indus- 
trial competmion  over  Eur.'pe  of,  417- 
424;  ability  for  competition  in  foreign 
markets  of,  424-420 :  improvements  in 
cotton  niauufacture  bv,  4.'i()-4.'i4 ;  con- 
sumption of  iron  and  steel  in,  435,  531; 
the  various  uses  of  iron  and  steel  by,  '. 
435-439,  540;  progress  of  the  iron  and  j 
Steel  industries,  441-449,  529-542;   na-  ' 


tional  wealth  of,  477-479;  consumption 
of  tea  and  coffee  in,  487;  revival  of 
trade  in  1880,  490,  492  ;  statistics  of 
failures  in,  502  ;  variations  in  the  de- 
mand for  laborers,  1870-1885,  503-504; 
strikes  in,  505;  innnigration  returns  of, 
606 ;  increase  of  nnirringcs  in,  ai  eco- 
nomic symptom,  507;  important  sections 
from  navigation  acts  of,  515-619;  cost 
of  the  Civil  War,  520-522;  payment  of 
war  debt  by,  ,522-524  ;  production  of 
iron  ore  in  18i(0,  .520-534  ;  of  pig  iron, 
53.5-538;  of  steel,  538-542;  municipal  re- 
ceipts and  expenditures  in  100  cities, 
642;  the  national,  state,  and  county  in- 
debtedness, 543-544. 
United  States  Census,  of  1790,  375-381; 
of  1810,  381-.383;  of  1820,  383-385;  of 
1830,  386-388  ;  of  1840,  388-389  ;  of 
1850,390-391;  of  1860,  301-303;  of  1870, 
393-395;  of  1880,395-399;  of  1890,  526- 
528. 


Versailles,  treaty  signed  at,  Jan.,  1871, 
329. 

Vessels,  economy  in  c;instruction  and  man- 
agement of,  305;  sailing,  disappearance 
of,  308. 

Vienna,  crisis  of  1873  begins  in,  356. 

Villainage,  abolition  of,  98. 

Villiers,  Mr.,  213,  215,  216,  221. 


Wages,  comparison  of,  in  the  18th  and 
19th  centuries  in  France,  68-69 ;  demand 
for  labor  can  only  increase  with  incrca-^e 
of  capital,  130  ;  necessarily  higlier  in 
London  tiian  in  the  country,  130;  com- 
parison of  weekly  wages  in  1790  and 
1800,  in  England',  130;  of  cotton-mill 
operatives,  in  Rhode  Island  in  1840  and 
]8S(),  318;  on  wheat  farms  in  the  United 
States  and  Prussia,  321 ;  of  English  work- 
men, 371 ;  of  women  in  cotton  mills  of 
Lowell,  415;  variations  in,  an  economic 
symptom,  404-496;  increase  in,  in  the 
iron  ore  mining  industry  of  the  United 
States  from  1880  to  1800,  533. 

War,  cost  of  French,  to  England  1793- 
1815,  124.  131;  cost  of  her  American 
war,  133-134 ;  method  of  payment,  138- 
147;  cost  of  the  American  civil,  520- 
622;  the  payment  of  the  war  debt,  52S- 
524. 

Watt,  James,  his  invention  of  the  steam 
tngine,  48-49. 

Wealth,  increase  of,  caused  by  the  great 


477-479;  conaumption 
e  in,  487;  revival  of 
•JO,  4*J2  ;  statistics  of 
variutiona  in  tiie  de- 
9.  1870-1885,  503-504; 
iiini(;rutiun  returns  of, 
nmrrinfjcs  in,  iii  eco- 
507;  inijiortant  sections 
acts  of,  515-519;  cost 
,  520-522;  payment  of 
!2-524  ;  production  of 
52i)-534  ;  of  pi>?  iron, 
5;!8-542;  municipal  re- 
iditurcs  in  100  cities, 
,  state,  and  county  in- 
44. 

BUS,  of  1790,  375-381; 
;  of  1820,  383-385;  of 
of  1840,  388-389  ;  of 
1860,391-393;  of  1870, 
395-399;  of  1890,  526- 


y  signed  at,  Jan.,  1871, 

I  instruction  and  man- 
sailing,  disappearance 

73  begins  in,  356. 

II  of,  98. 
115,  216,  221. 


n  of,  in  the  18th  and 

France,  68-69 ;  demand 

increase  witii  incica-^e 

necessarily   hijjiier  in 

he  country,  130;  coni- 

y  wages  in  1790  and 

130;   of  cotton-mill 

ude  Island  in  1840  and 

It  f.irrns  in  the  United 

,  y21 ;  of  Knglish  work- 

nen  in  cotton  mills  of 

itioiis  in,  an  economic 

increase  in,  in  the 

Kiustrv  of  the  United 

I  181J0,  533. 

h,  to  England  1793- 

ost  of  her  American 

luid  of  payment,  136- 

American  civil,  520- 

of  the  war  deht,  52r.- 

ivention  of  the  steam 

caused  by  the  great 


INDEX. 


641 


inventions,  31, 44;  estimate  of,  in  France, 
68-71 ;  public  income  and  expenditure 
of  the  United  Kingdom  from  1792-1849, 
134;  financial  policy  of  Sir  Robert  Peel, 
221-229;  change  in  distribution  rather 
than  in  the  increase  of,  from  the  new 
gold,  259  ;  cost  of  Franco-German  war  to 
France,  327-328;  result  of  the  war  on 
German  finance,  351;  increase  in  na- 
tional, an  evidence  of  economic  pro- 
gress, 474;  in  Great  Britain,  474;  in 
France,  475;  in  Germany,  476;  in  Aus- 
tria, 476 ;  in  the  United  States,  477 ;  cost 
of  the  American  Civil  War,  520-522  ; 
payment  of  the  war  debt,  522-524 ;  Ca- 
nadian, 525. 

West  Indies,  the  remoteness  of,  greatly  in 
lavor  of  its  European  colonies,  4;  the 
sugar  colonies  of  France  better  governed 
than  those  of  Britain,  26;  trade  of,  with 
Europe  carried  on  by  neutrals  during 
the  war,  1793-1815,  11*1-114. 

Wheat,  price  of,  in  England  in  1801,  207; 
in  1304,  208;  at  the  conclusion  of  the 
French  war,  in  1815,  209;  the  sliding 
scale  of  1829  regulated  by  the  price  of, 
213 ;  increase  in  price  of,  owing  to  the 
failure  of  the  potato  crop  in  Ireland, 
236  ;  momentous  consequences  of  im- 
proved conditions  of  production  and  dis- 
tribution in  the  instance  of,  313-317, 
320-321. 

Whitmore,  Mr.,  his  opinion  of  the  corn 
laws,  211. 

Whitne}',  Eli,  invention  of  the  cotton  g!n 
by,  405. 

Woollen  industr)',  the  most  ancient  ann 
important  in  Great  Britain,  32;  mer.s- 
ures  taken  for  its  promotion,  32-33; 
enactments  against  the  exportation  of 
the  machinery,  400-401. 

Work,  reduction  in  the  hours  of,  a  reason 
for  strikes,  504. 

Workingmen,  character  of  the  German, 
184;  condition  of  the  English,  371;  ad- 
vantages of  the  American,  417-423. 

World's  economic  progress,  the,  1873- 
1885,  chap.  xvii. ;  rapidity  of,  in  recent 
years,  469-473;  increase  in  national 
wealth,  an  evidence  of,  474;  in  Great 
Britain,  474;   in  France,  475;  in  Ger- 


many, 476;  in  Austria,  476;  in  the 
United  States,  477;  causes  of,  479-481; 
symptomatic  method  of  estimating,  dur- 
ing a  iixed  period,  481-482;  primary 
symptoms  of,  483;  extent  of  production, 
48.3-486;  extent  of  consumption,  486- 
489;  changes  in  transportation,  489- 
490;  state  of  the  money  market,  491; 
foreign  trade,  492;  secondary  symptoms 
of,  492;  variation  in  prices,  492-494; 
in  wages,  494-496;  rate  of  discount, 
496-497;  investments  and  dividends, 
497-501 ;  bankruptcies  and  failures,  502; 
reflective  symptoms  of,  503;  condition 
of  the  working  classes,  503;  strikes,  504; 
immigration  and  emigration,  505-506; 
relative  frequency  of  births,  deaths,  and 
marriages,  507-508;  the  future,  509- 
510. 


Young,  Arthur,  travels  in  France  of,  56, 
59,  62,  556. 


ZoLLVEREiN,  the,  motives  for  its  forma- 
tion, 170;  sentiment  of  national  unity 
created  by,  171;  the  union  not  due  to 
commercial  hostility  towards  other 
States,  172-173;  the  various  treaties 
which  preceded  the  tinal  league,  174- 
176;  its  extent  and  population,  177; 
objects  of,  178 ;  results  from,  179 ;  three 
desiderata  of,  180;  future  influences  of, 
181;  its  facilities  for  inland  trade,  182- 
183;  special  advantages  possessed  by, 
184;  tariffs  of,   185-193. 

Zollverein,  le,  historique  de  cette  associa- 
tion, 196 ;  population  des  £tats  associes 
en  1861,198;  traites  de  commerce  avec 
les  principaux  pays  du  monde,  198; 
valeur  de  son  commerce  <le  1835-1858, 
199;  principaux  produits  importes  et 
exportes  en  1834,  1844  et  1857,  200; 
commerce  avec  la  Frame  de  1847-1858, 
201;  recettes  des  douanes  de  1834- 
1859,  202;  recettes  en  1858  et  1859 
classics  d'npres  les  fitats  de  I'Union, 
2'^3;  partage  de  la  recette  entre  les 
divers  ttsita,  203;  navigation,  204;  avan- 
tages  du  Zollverein,  205t 


il 


